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Wednesday, January 7, 2009

> An LCCT too many

Malaysia must be a poor rich country.

Only in Malaysia can two government-linked entities - Sime Darby Berhad and Malaysia Airports Holdings Berhad - propose to build low cost carrier terminals (LCCT) miles apart to tap the fast-growing budget airlines market.

Sime Darby's RM1.6 billion facility, diplomatically called a LCCT despite having its own runway and air traffic control tower, has already been approved and is slated to open in March 2011. Malaysia Airports yesterday said it has a similar plan and could open the first phase with better connectivity and inside the KLIA at the end of 2011, pending government approval.

What it actually means is a transport plan gone awry.

KLIA was meant to be a hub with state-of-the-art facilities way before budget carriers and Tony Fernandes became the byword in air travel that just needed low-cost operations. Hence the temporary LCCT that became too small for a fast expanding Air Asia and sister Air Asia X.

Can Air Asia and Air Asia X wait for Malaysia Airports instead of going to KLIA East@Labu? Apart from the time and space, it's a question of money for the budget carrier.

It can save costs with its own airport but Malaysian taxpayers will have to pick the tab for custom, immigration and quarantine facilities apart from air traffic control and security services there.

Add to that the headache of managing flights in two airports just miles of each other.

But Malaysia Airports and the government have not done any favours to make KLIA a hub or ensure only one airport operator in the country.

The Senai International Airport was sold off in 2003 while Firefly is operating out of Subang Airport which only allows turbo-prop aircraft flights. All other carriers including Air Asia operate jet aircraft.

Coupled with only two European carriers operating out of KLIA, Air Asia has argued that KLIA is not a hub due to the lack of connectivity or airlines operating there apart from the fact its passengers fly point-to-point and don't need interlining facilities.

And if Malaysia Airports is right, Air Asia has quietly used government incentives to grow quickly and now feels it can fly alone without assistance or return the favour to turn KLIA into a major regional hub catering to all kinds of air travel.

With all these recent developments, the KLIA hub plan is only fit for the rubbish bin. The only way for the government to make sense of it or consumers to benefit is to allow more budget carriers to use the proposed permanent LCCT in KLIA Sepang or use turbo-prop aircraft out of Subang.

Only then, everyone can fly - The Malaysian Insider.