MAHB to ‘clean house’ at Malaysia airports

3 June 2023

Malaysia Airports Holdings Bhd (MAHB) acknowledges that not just Kuala Lumpur International Airport (KLIA), other Malaysia airports are also in need of a revamp but resources are limited.

It has had its share of brickbats over the years, with its premier airport asset, the Kuala Lumpur International Airport (KLIA), being the target of grouses for the breakdowns of its baggage handling system and the lack of seating along the walkways leading to the departure lounges.

Bathroom facilities used to have its share of complaints until KLIA rolled out refurbished toilets in recent years.

“We are going back to the core, to change and transform the DNA of the company in order for these initiatives to be taken to heart by our 8,000-plus employees,” Iskandar said.

The breakdown of the aerotrain system at KLIA in early March after an earlier malfunction in 2017, and the suspension of the aerotrain services since then, seem to sum up the state of the infrastructure and the urgency that is needed to ensure the airport, the main gateway by air into the country, can regain its position as one of the world’s top airports again.

From among the top 10 in the world when it first opened in 1998, it is now ranked 67th globally in a recent survey of air travellers.

Datuk Iskandar Mizal Mahmood, MAHB’s managing director since October 2021, does not deny that KLIA is in need of a makeover, including fundamental changes at the company, which he left in 2003 after helping to take it public through a listing in 1999.

“We acknowledge that we were there before; we aim to scale up the ratings to the top 10 again and this will take a holistic approach requiring vision, leadership and resources,” he says, pointing to measures that are being taken to ensure this happens.

Iskandar has a monumental task ahead of him, as MAHB operates 39 airports in Malaysia and one – Istanbul Sabiha Gökçen International Airport (ISG) – in Turkiye.

Besides KLIA, other airports in Malaysia are also in need of a revamp but resources are limited.

The changes he wants are in infrastructure, service level and business sustainability.

“We are going back to the core, to change and transform the DNA of the company in order for these initiatives to be taken to heart by our 8,000-plus employees,” he tells StarBizWeek.

He believes the effects of all these changes, which will take anything from three to seven years to roll out, will mean a firm base for the company to grow beyond Malaysia and Turkiye.

“We are one of the few Malaysian companies to build a global brand and we believe that we can scale back to the top again. ISG is a case in point, located in Turkiye, which is very central in terms of location to eastern Europe and the rest of the Middle East,” he adds.

The proper employee ‘DNA’

As Iskandar has identified the inculcation of the proper “DNA” to bring about these transformations he wishes to see, he elaborates by saying the next step would be to recruit the right employees.

He believes that the suitable values are essential among his top management team, so that the ideas for MAHB to improve itself and the conditions of Malaysia’s airports can be perpetuated throughout the company.

He notes: “With entry level employees, this may not be so essential as we have the propensity and capacity to train them.

“Meanwhile, for middle management positions, we are using a structured approach involving psychometric evaluation to identify the values, strengths and weaknesses of our new hires, although this is not applied at full scale to everyone.”

An even more critical point, he says, is the ability to share the visualisation of his vision to his employees, something he has been putting into practice in his past engagements elsewhere.

According to Iskandar, one of his more fruitful discoveries is that most times, it is easier to motivate employees without going into cold-hard numbers – such as profit figures or price-earnings ratios – but simply providing them with simple visualised ideas.

“As an example, we tell our employees to visualise passengers walking seamlessly from the plane into a newly improved airport, through customs, picking their luggage, and then exiting the airport with ease.

“Can we help move them on quickly, shortening the turnaround time so that more passengers can be served, which ultimately means more profit to us?” he asks.

Concrete plans: Aerotrains and Subang Airport regeneration

With the Aerotrains at KLIA currently being replaced with new ones, Iskandar says he is glad the process is going smoothly, with the construction phase beginning imminently.

“We expect to have at least one new train to be up and running by June 2024. The current Aerotrain service is fully suspended to facilitate and expedite the replacement programme.

“During this transition period, we are providing a full busing facility 24/7 so that passengers can be assured of a seamless airport journey.

“We have 30 buses continuously right now,” he points out, before mentioning that MAHB has also received delivery of a new airport apron bus and is expecting five more bus units with about twice the capacity of the current buses in operation.

Moving on to the much larger project of regenerating the Sultan Abdul Aziz Shah Airport – more popularly known as the Subang Airport – Iskandar reveals that MAHB has submitted the Subang Airport Regeneration Plan (SARP) detailed proposal on April 14 to the Transport Ministry (MoT) for its consideration and approval.

Expounding further, he says the detailed SARP proposal focuses on three key segments, namely business aviation, aerospace ecosystem and the New Green City Airport Terminal which will feature new state-of-the-art green technologies and intelligent systems, aiming to enhance operational efficiencies and guest experience.

He says: “The development will take seven years to complete, and Phase 1 is targeted to start in 2024 and to be completed in 2027 for five million passengers per annum (MPPA) terminal capacity.

“Meanwhile, Phase 2 development, which will increase terminal capacity from five MPPA to eight MPPA, is slated to start in 2028 and complete by 2030.”

With the SARP, Iskandar is confident that the project will impact Malaysia’s economy positively as it will contribute RM216.6bil to the country’s gross output over the next 25 years and will create almost 8,000 job opportunities.

Furthermore, he says the development will also improve public infrastructure around the area of the airport and ease the traffic congestion, especially at Jalan Lapangan Terbang Subang with the upgrading and expansion of the roadworks.

On the other hand, certain parties have raised potential issues with regards to the project, especially in light of the expected air traffic increase in the area should the regeneration be approved, given the heavy suburban and residential development that have gone on around the airport in recent years.

Iskandar recognises the concerns, before saying that air traffic would be a small fraction of KLIA’s given its size of 1,000 acres compared to the latter’s 14,000 acres, coupled with the fact that MAHB is planning to limit usage of the airport to narrow-body, single-aisle aircraft that seat a maximum of 200 passengers.

“There would also be a curfew imposed by the MoT for us to not fly planes in or out of the airport after 11PM, and we ourselves also would not want to operate the airport beyond that time,” he says.

Comparison with Changi and the PSC issue

Iskandar acknowledges that Singapore’s Changi Airport has set a high benchmark on what an airport could become, although he says the economics and dynamics of running a single airport is vastly different from MAHB’s network of 39 local airports.

“This is evident in the much higher passenger service charges (PSCs) – or more widely known as “airport taxes” – at Changi compared to Malaysia where we are one of the lowest in the region.

“We also get opposition from the public every time we try to increase the PSCs, as it believes higher PSCs will deter people from travelling here,” he observes.

Iskandar says he understands the conundrum of increasing the PSCs when public anticipation of seeing improved services beforehand at MAHB’s airports is high, particularly at KLIA.

On the other hand, he says the resolution to this chicken-and-egg situation has to commence somewhere, before adding that MAHB has tried to consistently bring its own costs of operation down to maintain profitability.

“The Aerotrain and baggage handling system has not been changed since KLIA opened its doors 25 years ago, but we are now changing it using our own money, and without any assistance from the government.

“As a company, we may not be able to stomach much more of these costs unless we are allowed to charge higher PSCs,” he explains.

Upgrades in process

However, with MAHB also running a network of airports on a cross-subsidisation model as not all of them are profitable, Iskandar appreciates the government’s efforts to ensure accessibility throughout the country, even at remote locations.

“Nevertheless, MAHB is committed to continuously improve the service standards in order to deliver the best public service to all travellers. Firstly, we need to ensure basic services expected of an airport are delivered at the highest standards.

“We need to acknowledge our current problems and get our house in order first, then we can be sure that the tangible initiatives we are embarking on such as infrastructure and service levels improvements can create real impact and be sustainable,” says Iskandar.

Apart from that the Aerotrain and baggage system upgrading, he says KLIA also recently launched several digital solutions such as EZPaz, allowing passengers to easily clear security touch points through biometrics facial recognition and without the hassle of producing any boarding pass and identification documents, and EZBagz, a self-service bag drop service where passengers can enjoy shorter wait times.

“The MYairports app has also been enhanced with a new feedback platform called Stardesk for passengers to lodge their feedback quickly and easily,” he points out.

Other than infrastructure, Iskandar says MAHB is also elevating the human experience, including bringing in exciting brands to enhance retail experience, rolling out cultural performances to entertain guests and improving passenger engagement through arts and music by providing opportunities to Malaysian talents to showcase their arts at the airport.

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