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Saturday, December 20, 2008

> New LCCT in Labu?

The Cabinet yesterday agreed to allow conglomerate Sime Darby Berhad and low-cost carrier Air Asia to build a RM1.7 billion low-cost carrier airport in Labu, Negri Sembilan, to spur economic growth amid a growing worldwide recession.

Transport Minister Datuk Seri Ong Tee Keat confirmed the Cabinet's agreement to the airport proposed last month by the government-linked company and the budget carrier, and backed by Negri Sembilan Menteri Besar Datuk Seri Mohamad Hasan.

The airport will be built on 2,800ha of Sime Darby land in the state's central corridor just miles from the KL International Airport in Sepang, Selangor which opened 10 years ago. Sources said the airport construction is fully funded by the private sector and will boost the flagging building industry as recession bites the region.

“The Cabinet felt it will boost the economy," a government source told The Malaysian Insider.

Prime Minister Datuk Seri Abdullah Ahmad Badawi's administration has proposed a RM7 billion stimulus package with a 4.8 per cent budget deficit early last month to mitigate the effects of a worldwide downturn but government officials privately say more will be spent due to the grim outlook for 2009. The government is also looking at private financing initiatives (PFI) to help boost the local economy.

One of the PFIs is the airport project by Air Asia and the plantations-to-power group Sime Darby which yesterday saw its proposal to buy a 51 per cent stake in the National Heart Institute (IJN) rejected by the Cabinet after a public outcry. The government said it will study the hospital proposal further.

Both Sime Darby and Air Asia have yet to comment on the approval or details of the airport project which will replace the RM108 million low-cost carrier terminal (LCCT) that first opened in February 2006.

The current LCCT is expected to reach its maximum capacity of 10 million passengers this year, prompting airport operator Malaysia Airports Berhad to build a RM160 million extension that can handle up to 15 million passengers when fully operational next March. The new extension was opened last Monday.

KLIA's first phase of a main terminal building and a satellite terminal with two runways was built for RM9 billion and is capable of handling 25 million passengers a year. It sits on a 10,000ha site that is formerly palm oil plantations and is planned to have another main terminal building and three satellite terminals with another two runways. It also houses cargo facilities and currently serves nearly 60 airlines.

The current LCCT serves Air Asia, Thai Air Asia, Air Asia AWAIR, Air Asia X, Cebu Pacific Airways and Tiger Airways. Air Asia X is the long-haul sister airline for the Air Asia group that entrepreneur Datuk Seri Tony Fernandes first founded in 2001.

He had unsuccessfully appealed to the government to allow the budget carrier to operate out of the the country's former gateway, the Sultan Salahuddin International Airport in Subang, prompting the construction of the LCCT and now the proposal for an entirely new airport.

The government had cited the Subang airport's unsuitability as an international airport as it is skirted by housing and industrial zones apart from the duplication of air facilities when rejecting the earlier Air Asia request. It now serves as a sky park for aviation-related industries and for scheduled operators using turbo-prop aircraft such as flag carrier Malaysia Airlines' community airline Fireflyz.

However, industry insiders said the government will still have to spend some money for the new airport particularly in providing air traffic control, Customs, immigration and other facilities for the proposed new airport. There is also some concern over its proximity to KLIA for air traffic control reasons.

It is also not known what will happen to the current LCCT and mushrooming facilities around it including a Tune Hotel being built currently once the new airport is completed. Tune Hotel is a budget hotel operated along similar lines as Air Asia and shares a common shareholder with the airline's main owner Tune Air Sdn Bhd.

The government has also asked the operator of a rail link between the KLIA and KL Sentral in central Kuala Lumpur to build a spur line to the current LCCT. It is not known if that project will be cancelled or a new link will be built to connect the capital city to the proposed airport - The Malaysian Insider.

The new LCCT in Labu should be reconsidered. We are getting more and more away from KL for whom the airport is supposed to serve. The bulk of Air Asia's passengers come from the Klang Valley. The idea of travelling to the airport itself will stop passengers from wanting to travel. Just imagine travelling to an airport taking more time than the flight. Please relocate nearer to KL and if possible back to Subang, the ideal place requested by Datuk Seri Tony Fernandes. Please think of the people's convenience more than business sense and ownership!  - My Journal.