10 May 2021
THREE unions of Malaysia Airports Holdings Bhd (MAHB) have requested for the group to remove WCT Holdings Bhd as its business partner, following the latter’s proposal to take over operations at Subang Airport.
In a letter to chairman Datuk Seri Dr Zambry Abdul Kadir, MAHB Unions for the Peninsular, Sarawak, Sabah and Labuan said by carving out Subang Airport from MAHB, it would cannibalise the group’s effort to truly be the national airport operator.
The unions added that because of the rapid development of Subang Airport, the income earned from its operations had been fairly distributed among the 39 airports run by MAHB nationwide.
As of now, the number of passengers has doubled in capacity at Subang to three million passengers a year, and MAHB is moving to expand the entire area. This includes the development of an aerospace ecosystem from manufacturing to flights services.
The unions said MAHB should not give up and let WCT take the advantage on Subang, which may only be driven by profit orientation without considering the impact towards the whole aviation sector, which has been benefitting all groups of Malaysians.
“This proposal of acquisition and break away (from MAHB) — which has been giving business to them — was supposed to be used to develop the airport together. But it, however, has turned (its) back (on) MAHB to take over Subang Airport.
“This is a sign of dishonesty. The unions proposed for them to be removed (as) MAHB business partner and the operation of Subang Airport (Terminal) should be returned to MAHB immediately,” read the letter sighted by The Malaysian Reserve (TMR).
The letter, dated May 6, was also copied to eleven board members of MAHB and its CEO Datuk Mohd Shukrie Mohd Salleh.
WCT is currently the operator of the Skypark Terminal (formerly Terminal 3) of the Subang Airport, through its unit Subang Skypark Sdn Bhd (SSSB).
The construction and property development group’s largest shareholder and chairman is tycoon Tan Sri Desmond Lim Siew Choon.
Several media, including TMR, reported that WCT is looking to acquire the Subang Airport, as the proposal has reached the Ministry of Transport (MoT) and the Ministry of Finance. A news portal reported that MAHB would lose RM11.9 billion in future revenue, based on the remainder of the Subang airport concession until 2069.
In a filing last Friday, WCT said it had proposed re-concessioning Subang Airport, not acquiring the asset, via its subsidiary SSSB.
“It is a common practice as the company has always been proactively on the lookout for new business opportunities.”
Meanwhile, MAHB said it has not received any details about the proposal, but the firm and its parent Malaysia Aviation Group had given their preliminary views on the suggestion.
The MoT said any proposal and redevelopment at Subang Airport, which is being carried out by MAHB and only at the preliminary stage, will be considered and decided by the Cabinet.
“It is a norm for the market to forward proposals to the relevant agencies to expand the existing or new assets,” MoT said.
However, MAHB Unions said such a proposal is against the privatisation agenda, which was supposed to allow the management of such essential services to be parked under one roof so that it can be cross-subsidised to other non-profitable airports.
The takeover, if it materialises, would affect the passenger services charge collected by MAHB and thus, the staff’s livelihood, said the unions. MAHB employs some 10,000 staff.
Former Malaysian Aviation Commission executive chairman Dr Nungsari Ahmad Radhi said the government should honour the operating agreement (OA) it has with MAHB, failing which would only trigger uncertainties among investors.
“MAHB is a public-listed company. If the government breaks its word, MAHB will tank and investor confidence also down.
“The OA is between MAHB and the government. As a signatory, it is MAHB’s call,” he told TMR.
However, Nungsari said the government can still overrule the agreement, especially noting that the land parcels, which are designated for airport use, belong to the Federal Land Commissioner.
Nungsari also said the proposal to make Subang Airport as a city airport like in the UK — is not viable as Subang is already surrounded by residential development, hence not suitable for commercial jet flights.
An industry insider said making Subang a city airport would only cannibalise the Kuala Lumpur International Airport (KLIA) market.
“Both airports are very near and that is why MAHB plans to have Subang as the only private jet hub with an aerospace ecosystem. Even the small commercial aircraft are actually not really practical there as it is already congested.
“If we turn this into a city airport with more scheduled flights, planes from KLIA will have to wait much longer to take off and people will shift back to Subang.
“So, what does the government want to do? Should we cancel the whole KLIA Sepang plan altogether, noting multibillion investment of projects are already in the pipeline?” said the industry insider.
MAHB Unions said all parties should be sensitive enough in forwarding such proposals amid challenging times due to Covid-19.
“We demand Datuk Seri (Zambry) to stay united with us to stop this hijack,” said the unions.
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