Fernandes: As MAHB’s biggest customer, we are saying we do not want (airside connectivity). Photo by Sam Fong/The Edge
Sobie: Very few other airlines are using klia2 and they generally do not have any connecting traffic.
Khair: The main point is that any airport that does not connect its terminals is very myopic and shallow. Photo by Suhaimi Yusuf/The Edge
Nungsari: KLIA probably does not need to expand terminal capacity so soon. Photo by Mohd Izwan Mohd Nazam/The Edge
PROVIDING airside connectivity for passengers transferring between the two terminals at the Kuala Lumpur International Airport (KLIA) has been a bone of contention for Malaysia Airports Holdings Bhd (MAHB) and its biggest customer at klia2 — AirAsia Group Bhd — for the past three years, and there is no resolution in sight.
The airport operator wants passengers flying in and out of the international airport to move seamlessly between the main terminal (T1) and klia2, without the need to exit and re-enter customs and immigration. However, this involves baggage transfer and interlining with different airlines, and that’s where the debate continues to rage.
AirAsia has been dismissive of such a move as it proposes that MAHB should focus on a dual-hub strategy where T1 caters to Malaysia Airlines Bhd and its full-service peers while klia2 is positioned as the region’s low-cost carrier (LCC) hub.
However, the current capacity constraints at T1 are making the need for airside connectivity — which means passengers can move between terminals without clearing customs and immigration — more urgent than ever. And MAHB has clearly stated that klia2 is not a LCC terminal, even though the terminal is dominated by AirAsia traffic and many airport users are of the view that the services and facilities at klia2 are not comparable with those of the main terminal.
As the Malaysian Aviation Commission (Mavcom) notes in a recent report, capacity at T1 is fully utilised while there is still plenty of capacity at klia2, which is only 70% utilised. The main terminal handled 28.1 million passengers last year, against an installed capacity of 25 million passengers a year. In comparison, klia2 handled 31.86 million passengers last year but its capacity is 45 million passengers.
MAHB is now at a crossroads. It needs to decide whether it will go ahead with introducing airside transfers, thereby incurring the wrath of its biggest tenant at klia2, AirAsia, or build a second satellite building, or third terminal, which will take 2½ to 3 years and comes at a time when the government is looking to trim its huge debt.
On the part of AirAsia, group CEO Tan Sri Tony Fernandes says the carrier does not see the need for airside transfers between T1 and klia2 as it does not interline with any other airline.
“There is nothing fundamentally wrong with (introducing) airside connectivity at KLIA. If MAHB wants to do it, it’s fine but it has to check whether it is really needed,” he tells The Edge in an interview.
“As MAHB’s biggest customer, making up 98% of the passenger traffic at klia2, we are saying we do not want it because we do not interline (our passengers) with any other airline except for (our long-haul affiliate) AirAsia X Bhd. We haven’t for 18 years (since its inception in 2001). It is just not in our business model.
“I am not against it, but it defies logic. It would be like me putting in a service in AirAsia that nobody is going to buy. This proves my point that there is a lack of understanding of the (LCC) model of AirAsia (by MAHB), when I said they did not need to build a RM5 billion terminal (klia2) for their biggest customer. We just wanted a terminal with simple facilities. In the same way, we do not need connectivity between T1 and klia2.”
Fernandes points to the four other airlines currently operating out of klia2 — Indigo, Cebu Pacific, Jetstar and Scoot — noting that they are unlikely to interline their passengers between their own flights and the airlines at T1.
Brendan Sobie, chief analyst at the Centre for Asia Pacific Aviation, says that apart from AirAsia, very few other airlines are using klia2 and these airlines generally do not have any connecting traffic at KLIA.
“If they did, they would likely not be at klia2 to begin with. You may recall Malindo Air moved back to the main terminal because of connectivity as it has several interline and code-share partners and relies quite heavily on traffic connecting from other airlines,” he says.
“Malindo Air is happy at the main terminal and any consideration of moving them back to klia2, of course, is not really feasible unless there is an airside connection. However, regardless of whether an airside connection is built, I think it is best for Malindo Air to simply stay put at the main terminal and MAHB can grow the main terminal if necessary to accommodate growth from Malindo Air and any other airline there.”
Still, some aviation experts and analysts see no reason for MAHB to hold back on introducing airside connectivity as improving connectivity between T1 and klia2 serves to boost KLIA’s status as an aviation hub.
Modalis Infrastructure Partners associate director Khair Mirza believes AirAsia’s concern is this: Airside connectivity between T1 and klia2 will give its passengers the possibility to connect to other international airlines such as Malaysia Airlines, Malindo Airways Sdn Bhd and Air France-KLM, making it less attractive as an option.
“But why does a government build public roads and not dedicated private roads? Sometimes, the public has to share scarce resources and not only think of its personal preferences. The main point is that any airport that does not connect its terminals is very myopic and shallow,” he tells The Edge. “All the four terminals at Changi are connected, both on the landside (that is, accessible to the non-flying public) and airside ... That is why it is so easy to connect at Changi, using any airline.
“A hub allows you to connect conveniently. (If KLIA continues to not provide airside transfers for passengers between the main terminal and klia2,) its hub capability stays at the current lower and less attractive level than airports like Hong Kong, Singapore or even Bangkok. Malaysia Airlines and Malindo Air are also less able to compete effectively for the existing passenger markets at klia2.
“The loser remains Malaysia as a country, and the landowner of the operator of our airports for the next 50 years (the government).”
MAHB was recently granted an extension to operate 39 airports nationwide until Feb 11, 2069.
Mavcom executive chairman Dr Nungsari Ahmad Radhi Nungsari believes that providing airside connectivity would be a cheaper option for MAHB than building a second satellite building.
“KLIA probably does not need to expand terminal capacity (and therefore incur large amounts of capital expenditure) so soon if carriers are able to interchange between terminals. For example, klia2 can take on increased capacity if T1 is unable to and vice versa,” he says in an email response to The Edge.
“Furthermore, in the long run, airports would need to be flexible enough to cater for the ever-changing business models of airlines in the future. Currently, the LCCs are already starting to focus on new ways to enhance the passenger experience and emulating the traditional full-service carrier (FSC) business models by providing interlining facilities and premium economy or business class seats.
“AirAsia itself not only flies a point-to-point network, but also provides interlining services for flights within the AirAsia group via its Fly Thru product. Having airside connectivity between T1 and klia2 will allow the airport to interchange its functions from being a hub or a point-to-point airport depending on the airlines that fly through it.”
And if the aim is to grow KLIA as an international hub like Singapore, Nungsari is of the view that airside connectivity is important as it will ease congestion at the international airport and allow for better quality of service for passengers.
He notes that discussions with stakeholders reveal that airlines are reluctant to move to klia2 as there is no connectivity between T1 and klia2 and thus, it is difficult for them to interline with other partners within their airline alliance. “Having airside connectivity between the terminals would allow airlines to move operations to klia2 as they will still be able to interline with any alliance partners who operate from KLIA,” he says.
Mavcom data shows that for connections solely within T1 or klia2 respectively, passengers can meet their next flight within 60 minutes.
“However, for transfers between T1 and klia2, it is recommended to allow at least three hours for flight connections. This disconnect places KLIA at a significant disadvantage to Singapore and Bangkok as their inter-terminal minimum connecting times are 45 and 55 minutes respectively,” says Nungsari.
“It also results in increased transport costs, wasted time and the added inconvenience of bringing luggage and belongings through the departure process again at either terminal.” Nungsari points out that airside connectivity may also increase the number of transfer or connecting passengers by attracting self-connecting passengers who may transfer flights between LCCs and FSCs.
“There is a growing trend in the airline industry today for passengers who prefer self-connections as the motivation is lower airfares, as well as the ability to travel to destinations that may not be served by a direct flight on a single airline,” he says.
Nungsari believes that some foreign airlines may even be attracted to code-share or interline with LCCs, citing Ryanair (LCC) and Air Europa’s (FSC) code-sharing arrangement for flights between Madrid and South America.
As the debate over whether to offer airside connectivity or build a second satellite building continues, Malaysia must be aware that in the two decades since it broke ground on KLIA in 1998, the airport has been overtaken by far newer and more advanced airports around the world in the best airport rankings. Already, its nearest neighbour and arch-rival, Singapore’s Changi Airport, opened its high-tech fourth terminal in November 2017, and the S$1.7 billion Jewel complex is its latest addition, with a new Runway 3 and Terminal 5 on the horizon.