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Labu LCCT terminal to meet AirAsia’s growth

SEPANG, 8 Jan 2009: KLIA East, the proposed new low cost carrier terminal at Labu in Negeri Sembilan, will sustain AirAsia’s exponential growth as opposed to the LCCT at KLIA from where it is operating now.

Otherwise, if it sticks to the LCCT at Sepang, AirAsia claims it would go bust, its chief executive officer, Datuk Seri Tony Fernandes, said today.

This is because the new airport, to be ready by March 2011, would be able to increase passenger capacity by up to 50 million passengers per annum, especially with its planned seamless connectivity, he said.

In contrast, he explained that although the current expansion plans for the existing LCCT at Sepang would increase capacity to 15 million passengers this year, no further expansion was possible due to its size constraints.

“In two years’ time, this airline will go bust if we do not have the facility. If we don’t move by 2010, we will lose almost a million passengers and about four million passengers by 2011,” he told a press conference here.

After the press conference, Fernandes took the media for a tour of the proposed site which is located at a plantation owned by Sime Darby Bhd, with which the budget airline would develop the airport.

He said the development structure of the RM1.6 billion airport was yet to be known although there were various ways to reduce the estimated cost.

“At the very worst, AirAsia will undertake the project. In a best case scenario, a third party will probably own the asset.”

“We do not see any issue in financing,” he said.

He said AirAsia was also in talks with infrastructure funding institutions should it need to undertake the project on its own.

“We are prepared for any eventuality, but KLIA East is definitely on. If Sime Darby doesn’t want to build it, we’re already talking to funding partners,” he said.

Asked if they would consider approaching airport operator Malaysia Airports Holdings Bhd to jointly undertake the project, he said: “So long, as it makes commercial sense.”

Expanding on the capacity constraints, Fernandes said it was imperative for AirAsia and AirAsia X, its international arm, to have the new facility by 2011 as the current LCCT was only built for 10 million passengers but the number of passengers had crossed the 11 million mark.

“Even with the extension, we are still short of two parking bays,” he said.

Fernandes said it was estimated that by 2013, the combined annual traffic flown by both AirAsia and AirAsiaX would be 60 million passengers per annum.

By then, AirAsia would have 159 narrowbody aircraft and AirAsiaX 25 widebody aircraft, leading to a combined total of 184 aircraft versus Malaysia Airlines’ estimated fleet of 125 aircraft.

“By 2013, only Japan Airlines would be bigger than us in terms of passengers. We could be the second biggest airline in Asia by 2030,” he said.

He said connectivity was also encouraging for KLIA East with the primary access being the Plus KL-Seremban Highway, the connecting road to Sepang F1 circuit and KLIA.

He also said connections to the proposed West Coast Highway and Putrajaya-KLIA-Senawang Highway could be achieved with a new connector road.

There could also be potentially two train lines — one served by the KTM Komuter (Rawang-Seremban line), for which AirAsia was in discussions with KTM to upgrade the Labu station as a rail hub, while the other was to have an inter-city train such as KL-Singapore, KL-Thailand and KL-East Coast.

He said the extension of the Express Rail Link (ERL) was also possible with additional investments.

He said KLIA East was an integral part of Sime Darby’s plan for its Negeri Sembilan Vision City (NSVC), which in turn is an integral part of its Central Vision Valley property development project spanning Selangor and Negeri Sembilan. — Bernama


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