Malaysia Airports To Build Low-Cost Terminal For AirAsia.

The proposed RM1.6 billion low-cost carrier terminal (LCCT) project in Labu by AirAsia Bhd is as good as off.

This followed reservations raised at a meeting yesterday attended by Deputy Prime Minister Datuk Seri Najib Razak, Transport Minister Datuk Seri Ong Tee Keat and AirAsia chief executive officer Datuk Tony Fernandes, sources said. The meeting, which lasted about an hour, was also attended by representatives from Malaysia Airports Holdings Berhad and senior officials from the Transport Ministry, Economic Planning Unit in the Prime Minister’s Department and the Finance Ministry.

“Malaysia Airports will build a new LCCT near the Kuala Lumpur International Airport (KLIA) in Sepang but they will have to work closely with AirAsia,” said a source.

“The company’s input in the building of the new terminal will have to be taken into consideration.” The source also said the government felt that AirAsia would not be able to raise the funds to develop the airport that it had earlier proposed in Labu, Negri Sembilan.

Ong said an official decision would be announced in two to three weeks’ time as it involved many parties. “The Transport Ministry, EPU, Finance Ministry, Malaysia Airports and AirAsia are meeting for the good of all parties concerned,” he told Bernama. Sources said AirAsia had been given two weeks to provide its wish list, now that Malaysia Airports would be building a permanent LCCT at KLIA.

AirAsia would have follow-up meetings with Malaysia Airports and a final meeting with Najib in two weeks, they added.Among the issues that will be discussed between AirAsia and Malaysia Airports are the specifications for the new LCCT and the passenger service charge.

It was reported on Jan 5, that conglomerate Sime Darby Bhd had obtained the cabinet’s approval to proceed with its proposed airport on its land in Labu, or KLIA-East, 22km from KLIA.

However, Najib said recently that the government was rethinking its earlier decision.The government, he said, was still looking at the proposal and there was no formal decision yet. Najib had also said that the proposal would have to be studied from all angles as the government needed to verify whether it could go ahead with it or a different arrangement was required.

AirAsia, in a statement released recently, had said it was looking forward to presenting Najib a detailed brief on KLIA-East and its plans to make Kuala Lumpur the regional hub for low-cost carriers. “Since the cabinet’s approval of Central Malaysian Vision Valley project, of which the KLIA-East LCCT is a vital component, AirAsia and Sime Darby have been in negotiations to finalise the details.”

The budget airline had also said it had received numerous enquiries from domestic and international investors interested in the project. The proposed airport in Labu would be AirAsia’s answer to its fear that Malaysia Airports would be unable to build a new permanent terminal in time to support its passenger and aircraft growth. The Labu plan, however, has come under fire as the public and non-governmental organisations raised questions on the need for a new airport, considering that KLIA was under-utilised.

Article from Business Times.com