Running an airport is easy but...

To directly quote the COO of Philippines Airline and President of San Miguel Corp, Ramon Ang on CNBC, "Even my high school son can run an airport. It's easy. You just have to hire the right people."

Is it that easy? It is easy now it seems as the competition internally among the airports are almost non-existence. It is easy when the rates are fixed by the government. Hence, whenever the airlines are pushing hard for your dollars, the airport makes money. The hard selling part are not by the airports but the airlines. It is easy when you have Airasia, Malindo, not MAS though. It is easy when there are more people whom are looking forward to travelling when flying is made cheaper.

Now, when it is easy, one cannot help thinking it is even easier to negotiate a good contract especially for Malaysia Airport. I am reading an old article where it says the LAD (Liquidated and Ascertained Damages) could be as high as RM4 to RM million a month for the delays. RM4 - RM6 million is hardly a decent LAD sum.

I am aware that with the KLIA2, Malaysia Airport will be the main beneficiary out of this as the low costs airlines are already delaying their plans where the current LCCT is already choked. I have yet to see how the KLIA2 will be different from the main airport terminal in Sepang, but the grand plan and size will definitely be positive for its earnings.

I know it can be easy as what Ramon Ang says, but one can for sure negotiate for a better contract...

So the LAD as announced below of RM199,445.40 comes to about RM6 million a month. My feel is this is way too small for both UEM and MAHB.