KLIA-East@Labu. Courtesy of AirAsia

Does Kuala Lumpur need a new Low-Cost Carrier Terminal (LCCT) when the existing one in Sepang, Selangor, is barely three years old? A RM1.6 billion question that has drawn answers, both positive and negative, mainly the latter.

One is inclined to answer yes. A new LCCT is essential due to the awful congestion in the current one. Opened in March 2006 the existing LCCT-KLIA, which could handle 10 million passengers annually (15 million, if expanded), is already close to bursting at its seams.

Anyone who has been to the LCCT-KLIA can be forgiven for thinking he’s in a war zone. The airport is so congested that long queues waiting for check-in, people sitting on floor or suitcase, the mad rush to board flights and an overcrowded toilet (there’s only one toilet in the small departure hall) are just some of the daily ills.

One can understand therefore the reason why Datuk Seri Tony Fernandes (pictured left), AirAsia’s Group Chief Executive Officer, wants to build a RM1.6 billion airport outside Kuala Lumpur, at Labu on the Selangor/Negri Sembilan border. The “People’s Terminal”, KLIA-East@Labu was scheduled to be in operation early 2011.

However, Fernandes did not anticipate the storm of protests and criticisms that have surfaced in the media and blogs ever since the Malaysian Cabinet gave its approval on January 5 to the proposal based on the premise that it would be a privately-funded project, without any government funding.

Everyone, from politicians, ex-politicians, bloggers to the man-in-the street have given their two-cents worth on why KLIA-East should not be built.

A sample of their comments:

• Malaysia Airports Holdings Bhd (MAHB), which owns and operates the KL International Airport (KLIA), objected as it says KLIA-East would be a duplication of resource as it plans to build an LCCT at KLIA by 2014.

• Safety concerns – KLIA-East is too close to the existing KL International Airport at Sepang, endangering public safety.

• Critics objected to the plan on concerns it may threaten growth of the main KLIA, as well as the government’s objective of making it as the region’s aviation hub.

• Others pointed out that KLIA was designed for 100 million passengers, and that it would be duplication of resources to have two sets of runways and runway control towers just kilometres apart.

• Some are also sore that AirAsia is seen to be getting its way almost every time when it deals with the government. Although the LCC has assured the public that only private funds (its partner is conglomerate Sime Darby Bhd) would be used for the airport, critics worry that the highways and train line extensions needed would be built with public funds.

The fact that the LCCT-KLIA is undergoing renovations further fuelled the discontent. Why build another when the current one is being expanded, asked some. (The revamped arrival terminal at LCCT-KLIA opened just before the end of 2008 and it is a far cry from the old one – it is big with numerous luggage carousels. The arrival hall promises to be the same when it is fully renovated by March.)

Stung by the criticisms, Fernandes went on the offensive. He called a media conference and took reporters to the proposed site to put his case to the people, sent emails to customers asking them to support the LCCT, and launched a microsite - KLIA-East - touted as "a one-stop info centre that dispels the rumours, corrects misconceptions and provides the context".

Visitors to the microsite are greeted with a welcome note from Fernandes, or “Tony”. Part of his letter reads: “We at AirAsia have been following the debate closely. It’s clear that there are a variety of opinions and I thought it be helpful to address some of these concerns on our own website.”

He says AirAsia shares the “pain” of passengers using the "cramped and uncomfortable” LCCT-KLIA and that there is little the airline could do “since the LCCT is operated not by us but by Malaysia Airports Holdings Bhd. We are also deeply worried that given the number of aircraft we have ordered – two new planes arrive every month now - AirAsia and AirAsia X will soon have no room to park the aircraft or gates to operate them from. The new terminal is a matter of life-or-death for us.”

His other argument is that the new airport will create new jobs, vital during the current recession that will see thousands of Malaysians losing their jobs. As Fernandes stated in his media briefing, “Research shows that at KLIA-East, between 0.77 And 1.71 workers will be needed for every 1,000 arriving passengers per annum. With 15 million arriving passengers in 2015, the number of jobs created directly by AirAsia at the terminal would be between 11,550 and 25,650.”

The Malaysian economy will also benefit, as with an estimated RM3.3 billion for the development of KLIA-East and another RM30 billion for Sime Darby’s Malaysian Central Vision Valley (NSVC), a total of more than RM33.3 billion will be pumped into the economy.

(The NSVC is part of Sime Darby’s Central Vision Valley property development project spanning Selangor and Negri Sembilan, a concept, which includes seaside resorts, a medical city and a safari park, among others.)

“In addition to that, even if every one of the 15 million passengers using KLIA-East spent only RM100, this would add RM 1.5 billion to the Malaysian economy.”

Fernandes added that KLIA-East would address its overcapacity problem as it would provide more room for aircraft and passengers, and would enable the airline bring fares down.

He argued KLIA-East is preferable to MAHB’s proposal of another LCCT project expected to completed by 2014, as that would be too late for AirAsia to keep up with its passenger growth.

AirAsia’s 6,500 staff, who called themselves AirAsians, also threw their support behind their boss. They appealed to customers “to voice out your support for the project – and for lower fares, convenience and a comfortable environment – by writing to the print media, appearing on broadcast media, responding in the online media, especially blogs, and contacting your elected representatives.”

Why you may wonder, is Fernandes so anxious to get the people on his side to accept his justification for KLIA-East@Labu?

Well, public opinion matters, and it does sway the government to reverse decisions made on certain projects. A case in point is the recent bid by Sime Darby (yes, the same company that will be AirAsia’s partner for KLIA-East) to take a stake in the government-owned Institut Jantung Negara (National Heart Institute) in Kuala Lumpur and to privatise it.

The hue and cry that followed led to the Malaysian Cabinet putting the proposal on hold, and Sime Darby to eventually withdraw its bid.

Fernandes knows that if he can win the hearts and minds of the people, KLIA-East would have a good chance of becoming a reality, and Malaysia could perhaps boast of having the first purpose-built low-cost airport in the world.”
- Corinne Wan

• Author’s Note:

In the latest development, Deputy Prime Minister Datuk Seri Najib Razak confirmed on Friday (January 23) the government is re-evaluating its approval to AirAsia Bhd and Sime Darby Bhd to build KLIA-East@Labu.

Najib, who is also the Finance Minister, said the government has not made any formal decision. "We are studying the matter from all angles, to see if we should go ahead or make a different arrangement.”

This move by the government could be in view of mounting controversy and squabble between various government-linked companies over the airport.