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IATA AGM: Crisis is an "opportunity to win"

9th June 2009 - 10:54 GMT | by The Shephard News Team


“The current downturn is not just an opportunity to survive, but to win.” So declared JetBlue Airways’ president and CEO Dave Barger leading off the debate on “Managing Through the Crisis” at the World Air Transport Summit, alongside the IATA AGM in Kuala Lumpur.

Barger noted three areas identified as the keys to success. “First, we must focus on cost and not let it creep up. Next, we must invest in customer service, and third, we must ensure our route network is defendable,” he remarked.

Part of JetBlue’s cost-control measures is the deferral of aircraft deliveries. “We planned to take 36 aircraft this year, but we will now only be taking nine. And we planned to take another 36 next year, but we will only be taking three,” Barger explained. He added his thanks to Airbus and Embraer for being so accommodating to these required changes.

Qantas Group CEO Alan Joyce also thanked his aircraft suppliers, Airbus and Boeing, for their help in delaying deliveries for both his airlines, Qantas and Jetstar. “The full-service carrier has been suffering, with premium traffic down 20%, and overall international traffic also 20% down,” he reported. “But our [low-fare] brand Jetstar has been having a record year with 30% growth internationally.

Joyce, who was CEO of Jetstar before his elevation to his current role, highlighted staff retention as a vital element to get through the crisis. “It might be less costly in the short term to let someone go, but in the long term keeping hold of high quality personnel will pay dividends. What’s more, you’ll have the key people in place when the upturn comes for the company to take the best advantage.”

Joyce believes that strength, flexibility, aggression and decisiveness are traits needed by airlines as they try to weather the storm. With his history of running a low-fare carrier, Joyce admitted that the experience does provide the ability to notice opportunities to be more aggressive, particularly with airports.

“Low-fare airlines go to airports and demand great deals – and get them. If they don’t get them they will often take their business elsewhere,” Joyce remarked. “It can be a bit more difficult with an incumbent like Qantas, but we do have to more aggressive sometimes.”

Providing a view of the crisis from the airport side of the fence was Jim Cherry, president and CEO of Aéroports de Montréal and chairman of the Airports Council International (ACI) World Governing Body. He reminded the airlines that, despite the downturn and fall-off in traffic, the industry must remain committed to serving the people who will fly this year. “Their expectations are not going to go down just because of the crisis,” he observed. “In fact they are likely to go up.”

Advocating greater dialogue between airlines and airports, Cherry chose to quote President John F. Kennedy, who, addressing the Canadian Parliament in 1961 during a low ebb in relations between the USA and Canada, stated, “Geography has made us neighbours. History has made us friends. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder. What unites us is far greater than what divides us.”

“If ever there was an industry for which those sentiments are appropriate, it is this one,” Cherry declared.

Bernie Baldwin, editor, Low-Fare & Regional Airlines/
Kuala Lumpur

The Shephard News Team


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