27 June 2018
A proposal for a new low-cost carrier terminal (LCCT) to be developed at Kuala Lumpur International Airport (KLIA) was made last year by a company called Citaglobal Airports Sdn Bhd, a move which looks to have had the backing of the AirAsia group, the largest user of klia2, the current LCCT.
Documents sighted by SunBiz revealed that the company’s director, Datuk Seri Mohamad Norza Zakaria, had proposed to then prime minister Datuk Seri Najib Abdul Razak, via a letter dated Nov 24, 2017, the building of a new LCCT that will be able to accommodate higher passenger numbers, especially with the establishment of the Digital Free Trade Zone.
Citaglobal Airports said it will be able to generate the required funds for the project from the private sector which will benefit the government in terms of savings on infrastructure and operation costs.
In addition to that, it said UK-based airport operator Manchester Airports Group Plc indicated interest to manage and operate the new LCCT.
The project was said to require 450 acres, for which Citaglobal Airports suggested the government transfer land rights from the Director General of Land and Mines to the Transport Ministry, which will then be leased out for the project for a period of 99 years.
“The necessity for a new LCCT in KLIA will make Malaysia a leading hub in Asia with a ‘dual hub’, whereby the main KLIA terminal will house the OneWorld Alliance, klia2 will house other premium airlines and the new LCCT will accommodate the low-cost carriers,” the proposal read.
Companies Commission of Malaysia records show that Citaglobal Airports was incorporated on Nov 2, 2017 and is involved in wholesale of goods without particular specialisation and management and business consultancy activities.
AirAsia Bhd issued a letter of support for the plan via a letter dated Nov 2, 2017 which coincides with Citaglobal Airport’s incorporation date. The letter carried AirAsia’s letterhead and bore the signature of its executive chairman Datuk Kamarudin Meranun and copies were sent to AirAsia group CEO Tan Sri Tony Fernandes and AirAsia Bhd CEO Aireen Omar.
The low-cost airline expressed its interest in shifting its operations to the new LCCT.
“We understand that Citaglobal Airports Sdn Bhd plans to develop a LCCT at KLIA. We are in full support of this proposal as the aviation sector is a major contributor to the country’s economic growth and accords significant contributions to other sectors of the economy,” it said, citing a study by Bain & Co.
Kamarudin said it would support Citaglobal by making the new LCCT the base for AirAsia Bhd and AirAsia X Bhd operations, have all flights operated by AirAsia group operate at the new LCCT and participate with Citaglobal to generate non-aeronautical revenue.
Citing the recent increase in Passenger Service Charge (PSC) introduced by the Malaysian Aviation Commission (Mavcom) and the proposed equalisation of PSC at both airports, on top of other cost increases proposed by the commission and the Department of Civil Aviation, the airline said an LCCT with a much reduced PSC and cost for travellers is required to accommodate the low-fare travel segment while KLIA and klia2 could be used to accommodate premium airlines.
AirAsia declined to comment in response to SunBiz’s queries on the matter.
According to Malaysia Airports Holdings Bhd, AirAsia accounts for 95% of traffic at klia2 and they are the largest occupant.
“Any new airport terminal construction will be under the purview of the Ministry of Transport and will need to get the government’s approval. We are currently guided by the existing National Airport Master Plan,” its spokesperson said, who added that it has not received anything official on the matter.
The Transport Ministry was yet to respond to request for comments as at press time.