5 June 2013
By TEE LIN SAY
AirAsia Bhd will not be affected by the delay in the opening of klia2, as it has been expected and it has a backup plan to ensure that the impact from the delay will be minimised, said AirAsia chief executive officer Aireen Omar.
“It (Malaysia Airports Holdings Bhd) made an announcement that klia2 won’t be opened on June 28. We are disappointed because it was supposed to be opened back in 2011 and now it has been delayed again.
“We will work closely with it and we hope it will come back with a more certain date for AirAsia to be able to operate from there,” she said after the company’s shareholders meeting here yesterday.
The completion date for the new low cost carrier terminal (LCCT) klia2, has been revised several times due to changes made from the original plan. Changes included building a bigger terminal that can handle more than 40 million passengers and installing an automated baggage handling system.
klia2 will have some 60 gates, 80 aerobridges, and retail space spanning 32,000 sq m. The project was first tendered out in 2009 at an initial cost of RM1.9bil which has ballooned to some RM4bil with the bigger capacity plans. AirAsia is expected to be the main user of klia2.
She added that AirAsia’s backup plan would involve optimising its resources to ensure that the impact was minimised.
“The LCCT in Sepang now has a capacity of 15 million people. Yes, there is overcapacity but we can still operate from it. Last year itself we drew in 20 million passengers. So naturally it is not going to be so comfortable because is is a very crowded airport,” she said.
Aireen added that AirAsia was expecting a passenger growth of 10% this year.
Asked about AirAsia’s lower first quarter net profit numbers, she said that this was due more to an accounting treatment.
AirAsia’s net profit dropped 39% to RM104.8mil in the first quarter ended March 31 from RM172.4mil in the same quarter last year. The lower earnings were due to foreign exchange loss on borrowings, higher finance cost and AirAsia Japan’s net loss.
“The first quarter’s drop in net profit was not an operational or cash item. It was an accounting treatment for the foreign translation of debt for US dollar. It is an accounting reporting item, whereby the foreign exchange had weakened,” she said.
Nonetheless, Aireen is optimistic looking forward, saying that she is very positive and excited for the year even without klia2 being ready.
“Yes there will be competition, but this year will be very good. We will be more efficient, yield where there is yield, monitor our cost and optimise our resources,”
“There is so much growth happening in our region. We have more than 150 routes, while Thailand and Indonesia are growing strongly. We also have our new markets in Japan, and soon in India. With all these happening, we are expecting traffic to Malaysia to also increase,” she said.
On the operations of AirAsia in India, Aireen said that a CEO had been appointed, and operations could be launched by year end.
“It is still in the infant stage and they are doing the necessary groundwork,” she said.
Previously, AirAsia has signed deals with Tata Sons Ltd and Telestra Tradeplace Pvt Ltd to set up AirAsia India, has submitted a no-objection certificate application to India’s Civil Aviation Ministry.
It had been reported that AirAsia India is expected to commence operations in September subject to obtaining the relevant regulatory approvals.