8 May 2021
A prominent businessman’s proposal to take over the airport in Subang could prove disastrous for Malaysia’s airport network, a source has told FMT.
This comes amid talk of a takeover of the Sultan Abdul Aziz Shah Airport (SAAS airport) and its surrounding area.
The Vibes reported today that WCT Holdings Bhd, largely controlled by property tycoon Desmond Lim, has put forward a proposal to the government to operate the airport area until 2092 through its subsidiary, Subang Skypark Sdn Bhd.
According to the source, the takeover would be “catastrophic”, as plans to turn the site into a 130-acre commercial development with malls, offices and exhibition space would ruin the network that has been developed between the country’s airports, all of which are run by Malaysia Airport Holdings Bhd (MAHB).
The running of the airports under a single custodian ensures that internal competition can be avoided and enables cross-subsidisation of airport operations. Only a handful of the 39 airports under MAHB are profitable and they help to sustain the others.
Should SAAS airport be carved out from the network of airports, it will come into competition with KLIA, affecting the sustainability of both airports.
“The cannibalisation of KLIA’s premium passenger market weakens the viability for KLIA’s full-service airlines, and would relegate KLIA to being a low-cost carrier hub,” the source said.
MAHB has previously stated its intentions to develop SAAS airport to work better in tandem with KLIA, in order to establish Malaysia as a regional aviation and aerospace powerhouse.
According to The Vibes report, WCT’s proposal to the transport ministry expressed the company’s intention to target express freight services as well as commercial air travel.
“Billions have been invested in KLIA’s infrastructure for cargo operations to align with the national agenda, so any express cargo at SAAS airport would directly compete with and kill KLIA’s potential as a regional cargo hub,” the source said.
The development site, which would be twice the size of the Mid Valley City in Kuala Lumpur, would be adding to a property sector glut that has been struggling to find tenants of late.
“Within a 5km radius of the airport, there are other upscale commercial centres such as Oasis Ara Damansara and Glomac Business Centre. There are shopping malls in the area that have struggled to find retailers.
“Will the Subang commercial development project benefit the community and the country as a whole? I don’t think so. All it will do is add to the glut of vacancies in the struggling commercial sector.”