Head to routes
Due to the crisis in the industry caused mainly by high oil prices, a major trend is emerging at this year's Routes Forum.
Looking for ways to share the oil price pain is how the organiser of the World Route Development Forum (Routes) is describing this year's event. As reports of ‘an industry in crisis' continue, the Routes event to be held in Kuala Lumpur, Malaysia from 12th - 14th October is witnessing a change in its trend.
While the world's airlines and airports attending Routes normally focus on new market opportunities, many airlines are requesting to meet airports they already serve.
Mike Howarth, CEO of Route Development Group believes the detrimental effects of the high oil price has boosted the events attendee numbers and that airlines are approaching airports to look for answers to soften the blow of huge fuel bills.
"With the effect of high oil prices, a lot of airlines are not planning new routes, but it doesn't seem to have had a significant impact on the event. Because of the current climate we weren't sure what to expect this year, but it seems airlines are coming to Kuala Lumpur to talk about routes they already fly and say to airports ‘how can you help me?'"
Routes began 14 years ago and is fundamentally an opportunity for airports and airlines to meet in a series of 20-minute meetings. Since the inaugural event Routes has grown in size rapidly. Howarth sees this as reflective of the airline/airport relationship.
"There was a view when the event first started that airlines did route development and an airport's job was to run an airport safely and efficiently. But increasingly as the risks and costs of developing new routes have increased so the airlines have allowed the airports into that process. Airports have almost said that their route networks are too important to be left just to airlines to decide. They feel they have to get involved and in some cases will provide financial incentives such as reduced landing fees. Whereas, in previous years, airports talking to airlines was just an angle of the event, the relationship is now a core driving force."
It is believed that at least one major airport authority will be using Routes to announce a cost saving initiative to support its carriers. Some airlines are also sending larger teams to bring a wider range of skills into the discussions. Howarth has been quick to notice changes to the delegate list.
"We have a low cost carrier which has just added its procurement manager as a delegate. Now, procurement managers don't do route development and he is clearly there for procurement reasons as opposed to just market development reasons."
So does this shift in trend, spell a change for future Routes events? Howarth believes it is a waiting game.
"Even if oil prices come down to a level that airlines can cope with, airlines aren't going to rush to start new services, so the best we can hope for is a year of consolidation. Just as oil prices are coming down demand is falling. The economy has taken a downturn and these are interesting times."
To reflect the international nature of the Routes event, each year sees a different nation play host. Two years ago, Routes made a break from its traditional European locations and travelled to Dubai. Howarth says it was a natural progression considering the rate of aviation development in Dubai and across neighbouring regions.
"The event was always held in Europe because this is where the airline/airport relationship started, but then in 2006 we made our first move out, which was to Dubai, almost to test how the event would be received."
It turned out not to be such a huge risk for the organiser as Dubai is so well connected to Europe in terms of flight networks, and the location of the Gulf region makes it easy to travel to from anywhere in the world. Howarth was quick to spot its potential.
"At the time of the event people were saying that Dubai exists in a bubble," Howarth continues, "but even then I viewed it as a sustainable, long-term change that would influence the aviation industry."
Many of the regions airports have signed up to attend this year's event in Malaysia. Abu Dhabi Airports Company, Ras Al Khaimah, Fujairah, Sharjah, Oman Airports, Bahrain, King Fahd (Dammamm) and Dubai will all be attending and at the time of press, Kuwait, Doha, Yemen and Queen Alia International were in talks with Routes organisers to confirm final details.
Mark Gray, director of EMEA at RDG admits that the event is being used by the airports to raise their profiles. "Fujairah will be promoting its cargo facilities, while Sharjah's CEO will be attending the Routes Leaders Forum."
High profile leaders from all the region's airports have been invited to attend the Routes Leaders Forum, which is co-located at the main event.
The forum is a platform for CEOs and leaders to address the most current and pressing issues to support this year's theme; to maintain a framework for sustainable growth within air transport.
The global audience has the opportunity to debate session topics such as ‘Living with High Oil Prices' and ‘Open Skies'. As the event approaches, the organiser will be announcing further topic titles, which at present are being kept under wraps.
Next year's event will be touching down in Beijing and 2010 will see its first trip to the Americas.
"We have chosen to take the event to Vancouver, Canada and then we are back to Europe, almost certainly, in 2011, although this is yet to be confirmed," reveals Gray.
He concludes: "We are looking to return to the Middle East in 2012. This will be an exciting time as Al Maktoum International at Dubai World Central and Abu Dhabi's new terminals will be operational."
Abu Dhabi Airports Company
A host of initiatives recently introduced are confirming the airport's image as a passenger centric facility. New state-of-the-art facilities total US$6.8 million dollars under an ambitious expansion programme which includes the impressive Midfield Terminal.
Bahrain International Airport
In 2006, the airport witnessed a 20% growth rate accounting for 6.7 million passengers while aircraft movement also increased by 11% to 81,789. Bahrain International is the major hub for Gulf Air which provides 377 weekly international services.
Dubai International Airport
The well-publicised expansion project at Dubai International is to provide additional facilities to accommodate the growing airport traffic, which is expected to cater for over 70 million passengers per year
Fujairah International Airport
Good weather conditions and close proximity to Dubai should help Fujairah International attract airlines at this year's Routes. Promoting its leisure and tourism benefits is going to be a key angle as the region builds on its centres of attraction and stunning mountainous backdrop.
Ras Al Khaimah Airport
RAK Airport is currently going through a transitional period experiencing growth in both passenger and cargo traffic fuelled by economic and industrial boom in the region. April 2007 saw the start of the airport's expansion programme.
Sharjah International Airport
New facilities enable the airport to cater to 8 million passengers. The airport features a new check-in area, departure and arrival lounges, holding lounges, coffee shops and a food court, plus parking for 800 vehicles.
A rapid development plan will expand and modernise Muscat International Airport, increasing its handling capacity to 12 million passengers per year. The first phase is expected to be complete within three years. Further phases will expand capacity to 48 million passengers by 2050.
King Fahd International Airport (Dammamm)
The West Terminal - first of two constructed - has the capacity to handle 16.2 million passengers. A linear concourse located airside provides access to and from the aircraft through 31 contact gates.