Monday, March 16, 2009

AirAsia to Get New No-Frills Terminal

Kuala Lumpur. A new 2 billion ringgit ($540 million) low-cost air terminal to be built by 2011 will make Malaysia a major regional travel hub rivaling Singapore and Thailand, and be a boon for homegrown budget carrier AirAsia, the country’s airport operator promised on Friday. 

Malaysia Airports Holdings outlined details of the new budget terminal, saying it will be located only 1.5 kilometers west of the main Kuala Lumpur International Airport, compared with 20 kilometers away for the existing budget terminal. 

The new terminal will have an initial capacity to handle 30 million passengers a year, which can be expanded to 45 million people, as well as 70 aircraft parking bays and 6,000 car-parking spaces, Malaysia Airports managing director Bashir Ahmad said. 

The terminal will connect with existing airport infrastructure and the main terminal building at KLIA, he said. 

“The main beneficiary of this design is AirAsia. We are building this based on their requirements,” Bashir said. 

The new budget terminal will also “ensure competitive growth of KLIA to emerge as a significant hub in the region,” rivaling Singapore’s Changi Airport and Thailand’s Suvarnabhumi Airport, he said. 

AirAsia, the region’s largest no-frills airline by fleet size, has said a bigger terminal is crucial to its survival with passenger traffic slated to reach 30 million and its fleet to grow to 184 planes by 2013. 

It was concerned about its ability to continue growing because the existing terminal can accommodate only 15 million people annually and has insufficient aircraft parking bays. 

KLIA, with annual passenger throughput of about 17 million and a capacity of 25 million, is relatively small compared to regional rivals. Changi’s three main terminals and one budget terminal have a capacity of nearly 69 million passengers, though actual numbers are just over half that. Passenger numbers at Suvarnabhumi, which opened in late 2006, are approaching its 45 million capacity. 

The government last month rejected AirAsia’s plan to build a 1.6 billion ringgit budget terminal in southern Negeri Sembilan state amid concerns it may undermine KLIA. It subsequently said it has allocated 2 billion ringgit for a new low-cost terminal near the main airport as part of an economic stimulus package unveiled on Tuesday. 

AirAsia deputy chief executive Kamarudin Meranun welcomed the government’s move but called for charges to be kept low. 

“It is timely. We are fully committed to the government’s plan to make KLIA a regional hub but the new terminal must be competitive.”  

Associated Press

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