AirAsia hits back

Malaysian budget carrier AirAsia is fighting back. The airline has been embroiled in controversy since last month when it was revealed that the government had quietly given it and local conglomerate Sime Darby approval to build an all-new airport outside Kuala Lumpur. Many, including Malaysia’s former prime minister, have questioned whether it is necessary, as you can read about in my last blog entry last week.

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.

AirAsia hits back at criticism of its planned new airport

Nicholas Ionides, Singapore (12Jan09, 05:27 GMT, 549 words)

Malaysianlow-cost carrier AirAsia is fighting back against criticism of its planto have its own airport near Kuala Lumpur, saying it has outgrown itsbase at Kuala Lumpur International Airport’s (KLIA) budget terminal andMalaysia Airports (MAHB) is not able to provide replacement facilitiesin time.

GroupCEO Tony Fernandes said in an interview with the New Straits Timesnewspaper that plans to have a dedicated new airport for AirAsia notfar from KLIA were borne out of “our fear of MAHB’s inability to builda 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”.

AirAsiahas been facing controversy since it was revealed late last month thatthe Government had given approval for the airline and government-linkedconglomerate Sime Darby to build an all-new airport for Kuala Lumpurnear KLIA at an area called Labu.

Thenew airport, to be known as KLIA East @ Labu, is to be built on landowned by Sime Darby and it will be dedicated for use by AirAsia,equipped with its own runway and air traffic control facilities. It isdue to open in 2011.

Criticssay 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 specificallyfor use by low-cost carriers. The terminal is already at capacity andMAHB has been proposing to build a much larger terminal for use bylow-cost airlines.

Fernandessays fast-expanding short-haul carrier AirAsia and its long-haul armAirAsia X are frustrated over repeated delays to MAHB’s developmentplans for KLIA.

MAHBsaid earlier this month in response to AirAsia’s announcement on theKLIA East @ Labu project that it could open its proposed new terminalat KLIA in 2011. Fernandes says this is unlikely, however.

“Ourprediction is that if we continue to operate from the LCCT, by 2011 itwould be 4.5 million short in passenger capacity. Already with thecurrent LCCT, we are running by a million passengers short and it’s anightmare,” he says.

“Priorto us coming out with the proposal to build KLIA East, there was nosuch plan [by MAHB for a new terminal by 2011] mentioned to us… Onthe actual date of completion for MAHB’s LCCT, we heard that it’sfluctuating between 2012 and 2014. This is despite the press releasethat states it would be completed by the end of 2011. That caused mepanic. You’re talking about our bread and butter. What am I going to dowith all the planes?”

Fernandesalso 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 ouroperational costs”.

“It’sgoing to be completely privately financed and AirAsia is ready toundertake it,” he says of the project. He estimates the cost at around1.3 billion ringgit ($365 million) and says that “we have beeninundated with calls from investors” seeking to help finance it.

“KLIAEast can be the first purpose-built low-cost airport in the world,” headds. “We can radicalise the passenger experience. No one has donethat.”

Source: Air Transport Intelligence news

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