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AirAsia’s Labu plans on hold

An AirAsia Airbus A320 aircraft (© Johnleemk /

PETALING JAYA, 23 Jan 2009: AirAsia’s plan to build its own low cost carrier terminal (LCCT) in Labu, Negeri Sembilan, has hit a snag — deputy prime minister Datuk Seri Najib Razak said today the government has yet to make a decision on the proposal.

“We are looking at it but have yet to make any decision. I cannot pre-empt the decision by making an announcement,” he said.

He was speaking to reporters after witnessing the handing over of the Bombardier CL415 amphibious aircraft to the Malaysian Maritime Enforcement Agency at the Sultan Abdul Aziz Shah Airport in Subang today.

Najib: government has yet to decide on
AirAsia’s proposal
Najib said the government was studying the Labu LCCT proposal to see “if we can go ahead or we need to make a different arrangement.”

To be called KLIA East @ Labu, the proposed new low-cost carrier terminal is expected to sustain AirAsia’s exponential growth as opposed to the LCCT at the KLIA, where it is operating now.

AirAsia chief executive officer Datuk Seri Tony Fernandes earlier this month said that the country’s premier low-cost carrier would go bust if it sticks to the KLIA LCCT, as it would be unable to handle passenger growth a few years from now.

The new LCCT, to cost RM1.6 billion (minus land cost) on a 2,800-hectare site, would be built under the private financing initiative by conglomerate Sime Darby Berhad and the budget airline.

If the government gives the green light for the project, the new LCCT is expected to be ready by March 2011.

However, the Labu project has come under a lot of criticism, including from former prime minister Tun Dr Mahathir Mohamad, who questioned the need for another airport when KLIA is under-utilised.

Malaysia Airports Holdings Berhad (MAHB), which operates most of the airports in the country, including the the current LCCT in Sepang, has also come up with its own proposal for a new LCCT, to be sited next to the KLIA main terminal.

The first phase of the project is expected to be completed in 2012.

There has been no decision made on MAHB’s proposal. — Bernama

See also:

Airport tussle
Govt asked to review Labu airport plan

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12 Responses to “AirAsia’s Labu plans on hold”

  1. Salak says:

    Isn’t time for competition well past?

    Let’s see lah! Who can do it better? Publish working arrangements and the ground rules and let the public know.

  2. Anon. says:

    The government hasn’t made a decision? This is the reason why our people lose jobs. The government has to stick its fingers into everyone’s pies. This is not a decision for the government to make as the project will be privately-funded and the land is not theirs. Concentrate on making KLIA and LCCT better first.

  3. aman says:

    Better stop this project. It just consumes the rakyat money.. .better upgrade LCCT rather than build a new one. If they go on with this project, what will happen with the LCCT? Will it just be closed? It was built using the rakyat money, so it will all be wasted …

  4. young_ENG says:

    From my understanding, AirAsia is a fast growing airline in our country. On average every two months, two new aircraft will be delivered to AirAsia and parking bays for the aircrafts have already reach the limit. This would affect the company’s growth due to additional time required to prepare the aircraft and at the end, reduction in on-time efficiency. Who should be responsible for this? AirAsia? MAHB? Or the government? AirAsia has to try their best to give the maximum efficiency on their services, but with the facilities that are PROVIDED and RENTED from MAHB, can AirAsia give their best? Should AirAsia be blamed for all the inefficiency?

    What will happen if the government proceeds with the [email protected]?
    1) This terminal is private-owned and probably no more airport tax surcharges – LOW COST!

    2)There will be more public transport connections provided from KL to the terminal e.g. KTM Komuter, buses, taxis – easy and again LOW COST!

    3) Bigger spaces provided to facilitate more counters, baggage handling, food courts, guest’s comfort – improving operations efficiency

    4) This project is privately funded and no rakyat money is involved, so why do you guys need to worry?

    Maybe some people think this project is under the government and for sure rakyat money is involved, but in fact it isn’t. This project is between Sime Darby and AirAsia, they need to get approval from the government because the airline industry has its standard regulations to be followed and the government needs to get involved; in terms of to comply with all the requirements. Even to set up a kandang lembu you also need to get permit and permission from state authority.

    What the government is afraid of is this project would kill KLIA or as they call it, THE GATE OF THE COUNTRY.

    The recent LCCT, FYI, is only a temporary LCCT that will be a cargo terminal later. That’s why you see the design is a bit better than a kandang.

    Don’t get influenced by all the rumours that are actually only a result of dirty politics. Better to think of the future of our aviation industry and what is positive about this project.

  5. desmond says:

    The LCCT is certainly made out of “rakyat’s” money, but has generated a GREAT DEAL more for the MAHB because of AirAsia. People must understand that without AirAsia, MAHB can’t make the MILLIONS that it is making now. The rakyat is paying “airport tax”, so rakyat’s money makes the terminal, then the rakyat will still be paying for the terminal after it is built.

    So when AirAsia wants to build their own airport, I say let them go do it. It’s from their own pockets (private funding) that means no rakyat money involved. And the airport charges would surely be a lot lower. The rakyat benefits.

    And by the way, the current LCCT is meant to be a cargo terminal anyway, built cheap, and charged premium. Who rugi? The rakyat. Why? Because some people don’t see the big picture! Who are these people? We, the rakyat!

  6. n9 says:

    The current LCCT is build for cargo terminal use. It’s not meant to be used for airlines. What is wrong for AirAsia to build its own airport? It’s not even using government/public money. It’s privately funded and at the same time it helps to create more job for others especially during the current economic climate.

  7. Frankly speaking, when we look at other countries, they can have low cost terminals on their own, without been criticised by their government. We don’t know who can do a better work arrangement and ground rules. Be competitive in the market for the long term.

  8. airasia staff says:

    It costs a hell lot of money to park an aircraft in KLIA when one aircraft docks in. This is a private company that is not supported by the government at all. Don’t you think that based on logic, our CEO would want to suggest something cheaper? The economy has gone down. People are losing their jobs because of that. Imagine having to pay for the parking charges and what-not when it lands in KLIA with the current economic situation? People might then lose their jobs because the company can’t sustain. There is always a reason to why our CEO proposed our new airport so people could still maintain their jobs and AirAsia could expand thus providing for the ones who frequently travel with AirAsia. There’s a saying that goes “don’t criticise what you don’t understand”. Unless you are contributing to the development of our company and know AirAsia well enough to comment you shall have a piece in their decision, otherwise we embrace it and keep our opinions to ourselves.

  9. ravi says:

    While we keep on talking about the taxpayer’s money going to waste, I see Labu as one way of saving it. Investing it on the doomed projects of MAHB is not the answer. Why try to repair something that was built broken?

  10. rol819 says:

    Why did MAHB come up with their proposal only after the AA plan? Are they short-sighted or they just don’t bother? The present LCCT is like a fish market and of course, AA is worried.

  11. Aviation hawk says:

    MAHB’s proposal is part of the National Airport Master Plan, which AirAsia had input in. So it is not like they did not know what MAHB was going to propose.

    As for the rakyat not having to fork out any money for Labu, think again. Things like the Customs CIQ, air-traffic control, immigration, etc. will be borne by the govt – and that means you and I. For all of AirAsia’s bluster, they cannot run an airport. It is not like running a kacang putih stand. There are numerous international regulations to meet, not the least of which state that the recommended distance between airports is 40km.
    As for airport charges, instead of blaming MAHB, blame the government, as they are the ones who set the fees. And why do you only believe AirAsia’s spin? KLIA has one of the lowest airport charges in the region. Yet, AirAsia owes MAHB a hundred million in fees. So, really, they can’t even pay that, yet Tony thinks he can whip up two billion for a new airport.

  12. Tax payer says:

    Do you know that when you get a free ticket from Air Asia you still have to pay MAB airport tax?

    You are suppose to travel free but MAB makes you pay for it, for doing nothing to help make your travel more comfortable.

    A privately owned airport means betul-betul travel FREE. Do you still want to pay MAB for doing nothing and just keep collecting AIRPORT TAX on AirAsia’s passengers?

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