Active Planet: Malaysian government says no to new airport

It's not often that a government U-Turns so rapidly as happened in recently in the case of the proposed new airport outside Kuala Lumpur (Air Asia wants a new airport) .

The chairman of Air Asia had, as we reported earlier, asked Malaysians to write letters to the media and to blog in support of the proposed airport. We suggested that this invitation might well backfire. And it did in the most spectacular way.

Just days after the announcement, Sime Darby, who had been reported as part of the development consortium, said that they were not part of the project per se. They said that they were merely landowners and that an offer had been made for some relatively unproductive part of their landbank. It is, they said, right that, as a public company, they should consider all options to increase the profitability of the land. Sale or lease were possibilities. Being a part owner or operator of an airport, however, was not part of their skillset and they did not intend to do it.

The reasons for the government's about turn were simple: KLIA, the principle airport for Kuala Lumpur is massive - and hugely underused. Malaysian Airports Holdings insisted on putting low-cost passengers into a shed, isolated from the main terminal, on the other side of the airport and failed to put in place any effective passenger infrastructure. Licensed bandits in taxi cabs charge a ridiculous fare to shuttle between the Low Cost Terminal and the main building.

The new site had no effective infrastructure - but KLIA was built with expansion in mind and the road network is in place to allow the addition of runways and terminals.

The decision to base AirAsia at KLIA attracted criticism at the time - it was told to move from its base at Subang, the former KL international airport. Clearly, its arguments over the expectation of growth in the next few years would have meant outgrowing Subang even more quickly.

But AirAsia has launched a series of long-haul flights and the facilities at the Low Cost Terminal are frankly woeful for long-haul passengers, although as a regional / local terminal it is comparable with many in second-cities around the world. It is a shed, but it's a good quality shed with decent services for those that turn up and get on a short flight. However, it is not a place one would want to arrive at on a busy day after a 12 hour flight with ridiculously underserved baggage retrieval, no inbound facilities except a small duty free shop. There are none of the immigration check in facilities for e.g. APEC card holders that are the norm at international airports around the region - but the equivalent at KLIA proper are plush.

The answer was simple: Malaysian Airports Holdings had to become less proud of their (admittedly lovely) terminal and let the budget airlines use it. After all, running an airport is, primarily, about one thing: passenger numbers. And KL's LCCT has been attracting both additional airlines and additional passengers whilst other facilities have seen numbers dwindle.

Watching the numbers passing through the LCCT, with nowhere to spend their money whilst shops in the main terminal complex stand devoid of customers makes no sense at all. Failing to earn revenue from aircraft being on the stands at the main terminal whilst parking on the tarmac 500 metres away is also not bright.

So there is to be, if not integration, certainly much closer co-operation between the LCCT and the main terminals.

That will benefit passengers, the environment and the airlines - for whom, provided the inter-terminal transit issue is properly dealt with, the co-operation will benefit as customers have an increased choice of destinations they can fly to. And Malaysia will benefit as KL becomes a hub - which, KLIA's operators might like to remember - was the reason it was designed the way it was in the first place.

Perhaps the most telling storyline was the headline in a local newspaper that whoever started the project, the taxpayer would end up picking up the bill. Although AirAsia denied this, it was clearly on the mind when the Deputy Prime Minister and colleagues considered written and oral presentations late last week. After the weekend, the formal announcement said ""The government thinks the AirAsia airport plan is not a viable project. It fears the cost of the construction may escalate and it may be forced to inject funds. The government does not want the project to be a burden."

A new LCCT will be built within the existing boundaries of KLIA - but the government has made it plain that MAH must work with AirAsia to develop it and make it suitable for their needs. The existing LCCT building has been undergoing extensive renovation and expansion for almost a year. But AirAsia alone now carries more than the enlarged building is designed to cope with (just under 16 million per year) as business travellers switch to Low Cost Carriers to save money. The new dedicated AirAsia terminal will have a capacity of 30 million passengers each year.