Govt wants AirAsia to move from KKIA Terminal 2

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KUALA LUMPUR: The government wants low-cost airline AirAsia Bhd to move its operations from Terminal 2 of the Kota Kinabalu International Airport (KKIA) to the newly upgraded Terminal 1 so that passengers can enjoy better facilities, said Deputy Transport Minister Datuk Abdul Aziz Kaprawi (pic).

“There is no reason for AirAsia not to move,” he said, noting that the government cannot practise preferential treatment and has to be fair to all airlines operating from KKIA.

Abdul Aziz, however, told The Edge Financial Daily yesterday that there is no deadline as to when AirAsia should move out.

He was commenting on Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed’s statement in Parliament earlier yesterday about AirAsia requesting lower passenger service charges (PSC) at Terminal 1, which airport operator Malaysia Airports Holdings Bhd (MAHB) had refused as it wanted to shut down Terminal 2.

Nur Jazlan told pressmen that Terminal 1 has been operating for several months now, and that the decision for AirAsia to move its operations back to the terminal after renovation works have been completed was made by the National Economic Action Council early this year.

“Now that Terminal 1 is open and operating, AirAsia needs to move back to Terminal 1. But MAHB wants to charge new rates, which are higher,” said Nur Jazlan.

He also noted that Terminal 1 is meant for full service airlines, “[upon] which MAHB wants to charge a single rate”, to which Air-Asia is objecting.

In February, AirAsia group chief executive officer Tan Sri Tony Fernandes said AirAsia will not make KKIA its hub in Sabah if it was no longer allowed to operate from Terminal 1, describing the move to Terminal 2 as “uneconomical” as its passengers would have to pay double the current PSC.

It is learnt that the PSC for international passengers at Terminal 2 is RM32, and RM65 at Terminal 1. Industry sources close to the matter said with AirAsia moving its operations, Terminal 1, which is “almost empty”, will be busy with traffic.

Fernandes has been instrumental in keeping the PSC, formerly known as airport tax, low for passengers. Until press time, AirAsia could not be reached for comment.

Meanwhile, Nur Jazlan said the PAC is recommending that the federal government penalise Global Upline Sdn Bhd, the contractor who worked on KKIA Terminal 2, for failing to comply with specifications stipulated in the upgrading works and not completing its job on time.

According to the PAC’s report on the project dated Nov 20, 2013, the Transport Ministry had to terminate Global Upline’s contract on Dec 31, 2012, and pay another contractor RM194.86 million to complete the job, causing the eventual cost of the construction job to balloon by more than 250%.

PAC started probing the project after its shoddy construction and three-year delay were highlighted in the Auditor-General’s 2012 report.

The airport’s upgrading project for Terminal 1 and Terminal 2 was divided into two packages, with an allocation of RM720 million each, and was awarded to WCT Engineering Bhd and Global Upline, respectively.


This article first appeared in The Edge Financial Daily, on October 29, 2014.