“It’s being constructed to cater for the expansion of AirAsia because by the end of 2012, the existing LCCT will handle 15 million passengers,” he says. That capacity is far below just this one airline’s bullish projections for passenger growth of 45 million by 2020.
And although KLIA2 will cater to LCCs, MAHB maintains that the terminal costs cannot be kept low.
“The new low-cost terminal is not low cost in terms of the services that we offer the airlines and the passengers,” says Bashir Ahmad, MAHB’s managing director.
Keep in mind that the current LCCT is a glorified warehouse; it was formerly used for cargo purposes and is expected to revert back to its humble origins when KLIA2 opens. Although MAHB has expanded it twice already, the building does away with amenities and lacked even a rail connection to KLIA’s main facilities for several years.
There is still no transfer facility at the LCCT. Passengers who need to make transfers, must clear immigrations, collect luggage, then clear customs and make their way to the Main Terminal Building, which by road is 12 miles away, to check in for connecting flights.
This will not be the case with KLIA2. The project, for example, includes 592,000 feet of retail space. Airport officials also contend that many middle-income people are choosing to travel on LCCs, but expect much more amenities once they land. In other words, building a “high-cost, low-cost” terminal might be a much cheaper way for MAHB to cater to that many more passengers.
“We believe Southeast Asia is a huge untapped hinterland, next to China and India,” explains Abdul Nasir Abdul Razak, MAHB’s general manager, planning and development. “When you consider there are 450 million people in Indonesia and only around 3 percent are currently flying, you can see the potential.”
Ahmad adds: “The design of the building takes into account input from all potential airlines. We want to ensure that passengers are comfortable and that the new terminal will provide excellent operational efficiency.”
With construction of KLIA2 under way, MAHB is now working with its airline partners to explore potential route expansions to make KLIA an attractive airport in Southeast Asia to other full-service airlines.
Sallauddin says MAHB wants to add new routes to Eastern and Central Europe, as well as attract direct flights to the East Coast of the United States. The country’s flagship carrier Malaysia Airlines continues to fly to Los Angeles, but stopped its flights to Newark Liberty International Airport nearly four years ago. Meanwhile, no United States carrier flies to KLIA. Northwest Airlines used to, but stopped the unprofitable flights during the airport’s early years of operation.
Total passenger traffic at the country’s major airports last year rose 10.6 percent to 65.3 million, up from 59 million passengers in 2010. Of this, international passenger traffic grew 10 percent to 30.9 million passengers in 2011, up from 28 million in 2010.
KLIA received a total of 37.7 million passengers in 2011, up 10.6 percent over the 34 million passengers in 2010.
“Yes, Singapore Changi Airport has strong business traffic, so does Suvarnabhumi Airport in Bangkok,” Ahmad says. “Our traffic may be lower than Singapore and Bangkok, but we have, nevertheless, been recording good growth. Even as most regions of the world were mired in the economic crisis of 2009, we experienced strong growth.”
KLIA has also spent approximately $39 million to upgrade its facilities to accommodate new generation aircraft. Malaysia Airlines, for example, has already ordered the A380 aircraft while Emirates started operating the A380 to KLIA this past January.
“We can also, of course, accommodate the Dreamliner,” Ahmad adds.
In an effort to further develop business, MAHB has created an incentive program for foreign airlines.
“We offer free landing for three years for new airlines,” Ahmad says. “We also give monetary benefits based on passenger growth rates.” A fully loaded 747, for example, could earn almost $2,500 based on a top growth rate.
Ahmad adds airlines come to Malaysia “mainly for traffic though the incentive program does provide a nice icing on the cake.”
Malaysia's AirAsia has urged the government to build more low-cost airline terminals in the country and cut airport taxes to woo more tourists.
AirAsia X will buy 20 Boeing 777s or Airbus 330s. Affliated AirAsia will also buy another 100 Airbus 320 planes.
The government had announced RM35 as airport tax at the LCCT for international flights and a standard rate of RM6 for domestic flights as levied by other airports in the country.