Malaysia’s airports to inspire confidence in aviation ecosystem

4 April 2023

Government finds that not all the airports are in real need of further development and Malaysia’s airports inspire confidence in aviation ecosystem.

The last three years have been challenging for airports all over the world due to Covid-19 travel bans.

Now as everything is returning to normalcy, so has the influx of travel demand. Following this, there is growing attention on the state of Malaysia’s airports which calls authorities to consider renovation and redevelopment to revive the tourism industry, as well as for economic reasons.

In addition to the Kuala Lumpur International Airport Terminal 1 (KLIA) and KLIA Terminal 2, other major local airports that operate with heavy traffic include the Kuching International Airport in Sarawak, and the Langkawi International Airport (Kedah).

According to Universiti Kuala Lumpur Malaysian Institute of Aviation Technology economist Assoc Prof Major Dr Mohd Harridon Mohamed Suffian, these airports are open to receive the influx of international passengers, on top of the burgeoning domestic passengers. The Kuching International Airport for example, has received more than 5.9 million passengers in 2019.

“This is a prominent stressor towards the airport as it has the capability to accommodate only five million passengers annually,” he told The Malaysian Reserve (TMR).

Mohd Harridon said there have been passenger increases at the Kuching and Langkawi airports, which is projected to continue in 2023 and beyond.

Airport Expansions

While the aviation sector has demanded further expansion of Malaysian airports, the government found that not all the airports are in real need of further development.

Due to the higher traveller footfalls, one that has been approved for expansion is the Penang International Airport (PIA) which Transport Minister Anthony Loke Siew Fook said will be sped up this year.

Notably, PIA is Malaysia’s third-busiest airport and has currently recorded a capacity of 6.5 million passengers per annum and this expansion is said to increase its capacity to 12 million passengers per year. The airport’s expansion would take three to four years to be completed.

In 2019, the airport had 8.33 million passengers, while last year it had only 4.27 million despite borders reopening in April.

Initially, PIA’s expansion project was supposed to take off in 2019 but was pushed back following a change of federal government in 2020. This project will be fully funded by Malaysia Airports Holdings Bhd (MAHB).

The last time the airport was upgraded was back in 2009, which was only completed in 2013.

Meanwhile, for East Malaysia, the Sabah Association of Tour and Travel Agents (Satta) proposed for the Kota Kinabalu International Airport (KKIA) to be extended to add 10 bays and a multi-storey car park with facilities such as a mall, restaurants and spa to accommodate the anticipated surge in visitors.

Kota Kinabalu MP Chan Foong Hin also voiced out to MAHB regarding KKIA’s poor maintenance and stressed that maintaining airport services is essential to give a good first impression of the city to tourists.

“Data provided by MAHB indicated a 10.4% increase of international passengers’ movement in Malaysia for the year 2022 in contrast to the numbers in 2019.
“This significant increase had taken a toll

on international airports like Penang and Kota Kinabalu,” Mohd Harridon commented.

KLIA’s Major Renovations

In its efforts to return to the top 10 of Skytrax’s world airport rankings by 2028, KLIA will be getting a major patch-up to handle operational tangles.

Its ranking has been dipping since 2013 and has dropped five more spots to 67th place this year.

KLIA’s makeover will incorporate self-baggage drop-offs, an overhaul of the check-in counters, unused aerotrain and things dealing with frameworks, modern lounges, and nourishment and refreshment outlets.

The aerotrain replacement will be conducted in stages and is expected to assume operation by March 2025.

The first phase, which is the design works, was scheduled to end in March 2023 where different stakeholders would engage and discuss transport safety standards.

The new aerotrain will be constructed from March 2023 to March 2025, carrying 90 passengers per car, 270 passengers per train and 5,400 passengers per hour per direction.

Not only will the trains be replaced, the entire track system would also be restored since it has been in operation for 24 years since inception.

The total cost to replace the nine aero-trains is RM700 million while the current fleet of aerotrains will run on a limited schedule due to its age and maintenance operations.

MAHB expects the number of passengers travelling through KLIA to exceed 25 million in 2023.

Mohd Harridon pointed out that although the increase in passengers is good for the group, it must be financially profitable for future refurbishments for passenger comfort and traffic growth.

“A point to ponder would be the development of a Transit Hub where well-known airports in Dubai and Singapore had done exceptionally well in converting and translating their airports into tourist attractions where passengers duly invest their time and money into facilities, attractions, shops, eateries and others which would emphatically benefit the economy of the designated nation,” he said.

He also suggested MAHB implement a maintenance plan focused on Condition Based Maintenance (CBM) to predict and prevent future issues since its aerotrains keep breaking down.

Kulim Airport not Economically Viable

During the revised Budget 2023 speech, Prime Minister (PM) Datuk Seri Anwar Ibrahim said that the government will not proceed with the proposed Kulim Airport which was argued to cater mainly for cargo services.

Instead, he said, the government will prioritise the expansion of the Penang and Subang airports.

It is noted that building the Kulim Airport would cost an estimated RM7 billion. Agreeing with the PM’s decision, Mohd Harridon said there is no strong economical reason to proceed and that it is not appropriate to develop a new airport at this point.

Furthermore, Kedah already has two airports which are operating, including Alor Setar and Langkawi, and adding another one will not be reasonable.

Moreover, Anwar explained that the federal government did not cancel the Kulim International Airport project but rather ECK Group — selected by the Kedah government as a strategic partner — withdrew their proposal to lead the airport’s development.

Subsequently, he received a letter from Kedah MB Datuk Seri Muhammad Sanusi Md Nor requesting the project be reconsidered.

“The economic realm and the juxtaposition of the wellbeing and social cause of the public take primary position in contrast to mega projects.

“The establishment of a new airport would take into account the amassment and development of land through utilisation of enormous financial capital,” Mohd Harridon added.

Furthermore, the return on investment must meet a reasonable time frame or the project is unattractive as there are many technical factors to consider.

Mohd Harridon also commented that a new airport must be financially sustainable for 50 or more years with multiple revenue streams to avoid relying solely on the government hence a detailed and rigorous plan is crucial to achieving this.

“If the establishment of the airport is to be under the full responsibility of a private organisation in terms of finance and technicalities, this approach can be contemplated provided the organisation has a concrete financial projection of the sustainability of the airport and the benefits that would be dispersed to the public are denoted,” he said.

Investor Ian Yoong Kah Yin also opposed the idea of building the Kulim Airport as it would be a “white elephant”.

He suggests that the government should upgrade the current Sultan Abdul Hamid Airport in Alor Setar instead as it serves the people of the state.

“The potential of Kedah, Perlis and Southern Thailand is tremendous for tourism and agro-based industries.

“Malaysian airports are generally poorly maintained. It will be more economical and expedient to improve management and maintenance than undertake costly refurbishment,” he told TMR.

Potential in Senai International Airport

Apart from reviving the main airports such as KLIA, analysts also believe that the Senai International Airport in Johor should undergo a revival.

Although it is not under MAHB, it has the potential to complement Seletar and Changi in Singapore.

Last year alone, Changi Airport received a total passenger volume of 32.2 million.

Mohd Harridon said it would be beneficial if the spillover effect of the economic prosperity of Singapore is promulgated to its neighbouring countries such as Malaysia, in particular Johor, in order to create a prosperous economic zone that is similar to Special Economic Zone (SEZ) of other countries.

“This is with avocation towards preferential terms and conditions that are beneficial for both countries but more concentrated upon areas in southern Johor and Singapore.

“But for this to bear fruit, Senai Airport has to be upgraded in terms of capacity building in order to be on par with Changi,” he explained.

Therefore, he advised that the Causeway and Second Link Bridge should be regularised, and rail services should be implemented for seamless passenger transfer between the airports to ensure smooth connectivity between Singapore and Senai.

This can create a financial boost for both areas as Senai Airport can act as a feeder for Singapore’s tourism industry and vice versa.

The airport will also enable both parties to gain economically through passenger goods, taxes, foreign currency transactions, cargo movements and more.

“The sharing of passengers between Senai Airport and Changi could also plausibly lead to the depreciation of stressors at the latter if its authorities decided upon the quest of passengers’ dispersion,” he added.

Source: themalaysianreserve.com

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