After initially maintaining uncharacteristic silence over the project, AirAsia group CEO Tony Fernandes is now vigorously defending his airline's plans, blaming the need for the new airport on national airports operator Malaysia Airports Holdings' indecision over when a new budget terminal may be built at Kuala Lumpur International Airport.
You can read Fernandes' full defence of the project in an interview he gave to the New Straits Times newspaper, in which he holds back little in his criticism of Malaysia Airports Holdings. If the link goes dead you can find the report that I wrote for our premium on-line news service Air Transport Intelligence by reading on below.
Nicholas Ionides, Singapore (12Jan09, 05:27 GMT, 549 words)
Malaysian low-cost carrier AirAsia is fighting back against criticism of its plan to have its own airport near Kuala Lumpur, saying it has outgrown its base at Kuala Lumpur International Airport's (KLIA) budget terminal and Malaysia Airports (MAHB) is not able to provide replacement facilities in time.
Group CEO Tony Fernandes said in an interview with the New Straits Times newspaper that plans to have a dedicated new airport for AirAsia not far from KLIA were borne out of "our fear of MAHB's inability to build a terminal in time".
He adds that "we can't afford a delay because a lot of our planes have been bought. We definitely need a bigger place".
AirAsia has been facing controversy since it was revealed late last month that the Government had given approval for the airline and government-linked conglomerate Sime Darby to build an all-new airport for Kuala Lumpur near KLIA at an area called Labu.
The new airport, to be known as KLIA East @ Labu, is to be built on land owned by Sime Darby and it will be dedicated for use by AirAsia, equipped with its own runway and air traffic control facilities. It is due to open in 2011.
Critics say it is not necessary as there is ample room for expansion at KLIA, where AirAsia operates out of the Low Cost Carrier Terminal (LCCT), which was built by national airports operator MAHB in 2006 specifically for use by low-cost carriers. The terminal is already at capacity and MAHB has been proposing to build a much larger terminal for use by low-cost airlines.
Fernandes says fast-expanding short-haul carrier AirAsia and its long-haul arm AirAsia X are frustrated over repeated delays to MAHB's development plans for KLIA.
MAHB said earlier this month in response to AirAsia's announcement on the KLIA East @ Labu project that it could open its proposed new terminal at KLIA in 2011. Fernandes says this is unlikely, however.
"Our prediction is that if we continue to operate from the LCCT, by 2011 it would be 4.5 million short in passenger capacity. Already with the current LCCT, we are running by a million passengers short and it's a nightmare," he says.
"Prior to us coming out with the proposal to build KLIA East, there was no such plan [by MAHB for a new terminal by 2011] mentioned to us... On the actual date of completion for MAHB's LCCT, we heard that it's fluctuating between 2012 and 2014. This is despite the press release that states it would be completed by the end of 2011. That caused me panic. You're talking about our bread and butter. What am I going to do with all the planes?"
Fernandes also says AirAsia is unhappy with MAHB's charges at KLIA, adding that "if we have our own runway next to our terminal we can cut our operational costs".
"It's going to be completely privately financed and AirAsia is ready to undertake it," he says of the project. He estimates the cost at around 1.3 billion ringgit ($365 million) and says that "we have been inundated with calls from investors" seeking to help finance it.
"KLIA East can be the first purpose-built low-cost airport in the world," he adds. "We can radicalise the passenger experience. No one has done that."
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