30 June 2016
TAN Sri Tony Fernandes, the man who transformed AirAsia from a dying two-plane airline into the world’s No. 1 low-cost carrier in just a decade has had problems with klia2 from the first day it opened for operation two years ago.
klia2, which cost some RM4 billion to build, was meant to replace the Low-Cost Carrier Terminal, or LCCT, that despite its lack of space and simplicity was a user-friendly airport as travellers could easily find their way from the point of check-in to board their flights.
It was kind of a “cultural shock” to many when the shift from LCCT to nearby klia2 took place. Initially AirAsia refused to budge and move its operations to the new airport which eventually cost double its original project value.
But with utmost reluctance and under protest, AirAsia finally had no choice when the deadline was given by Malaysia Airports Holdings Bhd (MAHB) for LCCT to be shut down.
Hardly a year into service, klia2 was widely reported in the media as facing operational woes like when sections of the aircraft parking apron were flooded, gas pipes leaked and depressions formed in the ground.
A few rounds of meetings took place between MAHB and AirAsia, klia2’s biggest customer, before the problems were fixed and the acrimony between the two parties subsided.
AirAsia’s business model is low-cost which has proven to be a phenomenal success and anything that increases operational costs will have a killing effect on budget airlines.
Last year, AirAsia chief executive officer Aireen Omar was reported as saying that the airline had spent some RM30 million more in operational costs since moving to klia2.
“Why built a four-star airport for budget airlines?” was one of the questions Fernandes posed to me in a series of texts we exchanged on the issue in the early days of klia2 start-up.
The internationally-recognised budget airline icon had a point and a strong one at that because we already had the original KLIA which turned 18 on Wednesday for purposes other than low-cost carrier operations.
But MAHB has other plans for klia2 as well, insisting that it was designed to allow seamless connectivity and be an aviation hub for both local and international low-cost plus full service and hybrid carriers.
After some months of disquiet between both sides, Fernandes made headlines a week or so ago when he called for klia2 to be renamed LCCT with AirAsia to spend over RM20 million to market it as a low-cost terminal.
He vehemently defended the proposal by saying the airline would continue to refer to klia2 in its promotional campaign as LCCT.
“We do not have the right to change the name of the terminal. We are suggesting it. But we are a marketing company and we are seeing an opportunity in making Malaysia the hub for low-cost travel for Asia,” he said.
He bolstered the argument by saying that for the first time in history, Singaporeans are now coming to Malaysia and flying AirAsia to different parts of Asia, reversing previous trends of Malaysians using Singapore to do so.
But Transport Minister Datuk Seri Liow Tiong Lai won’t budge, too, insisting there won’t be a name-change as it’s not necessary at all while Fernandes’s contention is that the name klia2 does not mean anything to budget airline travellers.
A much harsher brush-off came from MAHB managing director Datuk Badlisham Ghazali who said that MAHB reserved the right to maintain the klia2 brand including resorting to legal action.
According to him, the proposed name change was already causing confusion among passengers and he has heard that many passengers had gone to the LCCT for their flights.
It’s welcome news that both Liow and Fernandes had a meeting on Wednesday to discuss the row, which the AirAsia Group CEO described as a good meeting and that the minister understood clearly that klia2 is a low-cost hub.
The business of governments is basically to be the facilitator for businesses; and in business, who is there to challenge the age-old notion that the customer is always right?
Since AirAsia came on the scene it has flown in tens of millions of passengers into the country and it’s undoubtedly the biggest enabler in our growing tourism industry.
Low-cost travel and budget airlines are very much the in-thing worldwide and Malaysians must give credit to our very own AirAsia which is creating waves and changing the way people are travelling, and now flying some 50 million passengers annually around the region and beyond.
It also reserves the right to promote klia2 as an LCCT and the bottom-line is that this is only good for the Malaysian economy.
It’s time to call for a truce to all the bad blood between AirAsia and MAHB and I know Liow can play a big part by taking an accommodative stand.
As Fernandes said: “If you tell me what we are doing is bad for Malaysia, then I will stop.” Perhaps it’s also time to call a spade a spade.
Original Source: www.thesundaily.my