Malaysia to build $540 mln budget air terminal

Malaysia to build $540 mln budget air terminal

The Associated Press
Published: March 11, 2009
KUALA LUMPUR, Malaysia: Malaysia's government will build a new 2 billion ringgit ($540 million) low-cost air terminal by 2011, easing budget carrier AirAsia's concerns about its ability to continue growing, officials said Wednesday.
Malaysia Airports Holdings Managing Director Bashir Ahmad said the terminal will be built near the main Kuala Lumpur International Airport, with a capacity to handle 30 million passengers a year and should be ready by the second half of 2011.
"We've found the location and will be announcing it at the right time," he said.
AirAsia has said a new, bigger terminal is crucial to its survival with passenger traffic slated to reach 30 million and its fleet to grow to 184 planes by 2013.
The airline was worried because the existing terminal — also located near the main international airport — can accommodate only 15 million people annually and doesn't have enough aircraft parking bays.
The government last month rejected AirAsia's plan to build and operate a 1.6 billion ringgit ($432 million) budget terminal in southern Negeri Sembilan state after critics, including Malaysia Airports, voiced concerns it may undermine the main airport.
The government subsequently said it has allocated 2 billion ringgit to build a low-cost terminal near the main airport as part of a 60 billion ringgit ($16.2 billion) economic stimulus package unveiled Tuesday.
AirAsia officials couldn't be immediately reached Wednesday for comments.
The carrier's long-haul sister company, AirAsia X, launched Wednesday its first flight from Kuala Lumpur to London, marking a new stage in the group's international expansion.
The company said in a statement the inaugural flight took off for London's Stansted Airport with 286 passengers on board, after almost a two-year delay.
AirAsia X, which began operations in November 2007, currently flies to Australia and China. It is 48 percent owned by Aero Ventures, which is in turn part owned by AirAsia and AirAsia X founder Tony Fernandes. Billionaire Richard Branson's Virgin Group and AirAsia each hold a 16 percent stake in AirAsia X.