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LCCT Under MAHB

This article is a verbatim copy of the original article from The Star.

August 14, 2007

By B.K. SIDHU 

PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB) is likely to add one more airport under its wings when the new low-cost carrier terminal (LCCT) is up and running by the turn of the decade.

It may still be early days as details of the new LCCT – which will be housed next to the existing KL International Airport (KLIA) – will only be announced in a month’s time but, sources said, management wise, it would go to MAHB.

The Government announced last week that a new LCCT, that could cater up to 30 million passengers a year, would be built close to the KLIA at an undisclosed amount.

It is learnt that MAHB would not only just manage the airport but would also be involved in the construction by way of preparing all the ground work – from design to issuing out tenders – for the various jobs.

In any case, this new airport is a recommendation by MAHB and it only makes sense for the airport operator to be involved from the onset so that the airport shapes up to the way it had recommended.

In February, StarBiz reported that MAHB had recommended to the Government for a new LCCT to be built next to the present satellite and main terminal buildings at KLIA.

Unlike the existing LCCT, where linkages are only by road and air, the new LCCT will also be linked by rail as the Express Rail Link from KLIA and KL Sentral will be extended. The two airports will also be linked by a sky train.

Under the original master plan for KLIA, there should be ample land bank to house four satellite buildings, two terminal structures and five runways. If all the buildings are constructed, KLIA should be able to handle 100 million passengers a year.

Currently, AirAsia, its Thai and Indonesian subsidiaries, as well as Cebu Pacific Airways operate from the existing LCCT. Over the next few months, AirAsia X will begin flying long haul from the same terminal. More low-cost carriers are expected to use the new terminal.

Besides managing the KLIA and the current LCCT, MAHB manages 37 other airports in the country. It recently won rights to manage the Sabiha Gokcen International Airport in Turkey in a RM9.1bil deal and, prior to that, Astana International Airport in Kazakhstan. It is also involved in the management of Hyderabad and New Dehli airports in India.

Better times are ahead for MAHB that has waited for a long time for its financial restructuring to be completed. In fact, details of a new plan on how it should move to remove its overhang of the RM800mil it owes the Government are expected to be announced soon.

One clear sign that the financial restructuring is at its tail end is the offloading of its role in the Formula 1 championships to Khazanah Nasional Bhd in a deal valued at RM389.35mil.

Analysts are also taking a closer look at MAHB these days given its effort to get more business.

An analyst felt that MAHB would be better placed to drive through operational improvements with the financial restructuring overhang resolved as it would remove investors' concerns and allow for more earnings clarity, going forward.

This article is a verbatim copy of the original article from The Star.