On 9 May 2014, LCCT officially closes, a new Kuala Lumpur International Airport 2 (KLIA2) is built to replace the LCCT with bigger & better facilities. As a result, the info posted on this website is no longer applicable to the new KLIA2. Visit www.klia2.info for latest info on the new klia2 terminal.

MSWG wants more information on KLIA East@Labu

Thursday January 15, 2009

The cost benefit of the proposed low-cost carrier terminal (LCCT) in Labu, Negri Sembilan in financial and non-financial terms is an important question that needs to be addressed, according to Minority Shareholder Watchdog Group (MSWG) chief executive officer Rita Benoy Bushon.

At present, information on the proposed joint development of KLIA East@Labu by Sime Darby Bhd and AirAsia Bhd was sketchy, she said in a statement.

"The funding arrangements and ownership of the proposed LCCT are also important for shareholders to assess the impact on the companies' gearing and cash flow," she said. In MSWG's view, the proposed new LCCT was expected to negatively impact Malaysia Airports Holdings Bhd (MAHB), Bushon said.

"It will cannibalise the existing capacity of KLIA given that AirAsia contributes 16% and 49% of international and domestic passenger movement respectively to the traffic flow in KLIA."

She said under the current depressed market condition and likely difficult times ahead, initiatives led by the private sector were most welcome.

While there may be persuasive arguments for Sime Darby and AirAsia to build a new LCCT, MSWG believed that an orderly development and construction of airports and aviation infrastructure in the country must be given top consideration to ensure optimisation of resources in line with the country's National Airport Masterplan.

"It is good to have competition but whether there is room for two LCCTs is debatable," Bushon said.

While directors had a duty to make decisions in the best interests of their company, its shareholders and stakeholders, MSWG also believed "commercial viability, merits of competition and value creation should be at the heart of any corporate decision," she said.

In light of this, Sime Darby, AirAsia and MAHB would need to provide more information and answers to address shareholders' concern, she said.

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

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