AirAsia’s boss, Dato’ Seri Tony Fernandes, may have seen his dream of connecting Asia with Europe come true via AirAsia X’s, AirAsia’s affiliate airline, inaugural Kuala Lumpur-London flight on March 11.

However, his other dream of owning his own low-cost carrier terminal (LCCT) at Labu in Negri Sembilan has gone off the radar as the joint proposal with business conglomerate, Sime Darby Bhd, to build a new RM1.6 billion KLIA East@Labu has been rejected by Malaysia’s government.

Instead the government has tasked Malaysia Airports Holdings Bhd (MAHB), the operator of airports in the country (with the exception of Senai Airport in Johor Bahru), to build a new LCCT on a site next to the KL International Airport (KLIA) in Sepang.

The new RM2 billion LCCT will be just 1.5 kilometres away from KLIA’s main terminal, compared to 20 kilometres for the current LCCT.

MAHB chief executive officer Dato’ Seri Bashir Ahmad (pictured left), when unveiling the new LCCT earlier this month, said they are talking to airlines to finalise the terminal’s design and it could be used by both low-cost and full service carriers.

A third 4km runway, only 1.5 km from the second runway, will also be built with the new LCCT and full parallel taxiways for quick turnaround between both runways.

Work on the LCCT is expected to begin this June and completed by third quarter of 2011. The airport is expected to handle 30 million passengers per annum compared to the 15 million currently, with the capacity to expand to 45 million per annum.

“It will be designed to handle up to 45 million passengers a year and be connected to the main terminal via an extended Express Rail Link (ERL) and a new side road,” Bashir said.

With the new LCCT, KLIA will be able to handle up to 90 million passengers a year.

Covering over 150,00 sq metres LCCT@KLIA will have 70 parking bays for aircraft, numerous retail and food outlets, a 6,000-vehicle parking complex and an integrated transport hub for buses and taxis.

On AirAsia’s response to LCCT@KLIA , Bashir said the LCC has seen the location and was happy with it. It has requested at least 95,000 sq metres for the new LCCT but it did not want to use aerobridges. He added that about 10,000 sq metres would be set aside for AirAsia’s headquarters, which will located away from airport operation areas.

Bashir said AirAsia would enjoy greater operational efficiency with the second and proposed third runway just 1.5 km apart.

“The proposed new runway is also big enough for a B747 to land."

Landing and aircraft parking fees and airport tax will probably remained unchanged at the new LCCT as the government decides on all aeronautical charges and airport tax, and it has yet to indicate any changes.

Bashir said the plan to build the new LCCT near the main terminal was part of the National Airport Master Plan for Malaysia to strategically develop all 24 airports in the country over 50 years.

“This is to ensure KLIA will grow into a significant regional hub.

On completion of the LCCT@KLIA the old LCCT will be converted into a cargo-handling terminal.

The airport project would be funded by the company via loans, said Bashir.

Allocations have also been set aside under the RM60 billion stimulus package (mini-Budget) unveiled by the government on March 10 to spur to growth and prevent the economy from slipping into a deep recession. Investment projects worth RM5 billion to be implemented on an off-Budget basis will include the new low-cost carrier terminal at the Kuala Lumpur International Airport, expansion of Penang Airport, and improving telecommunication infrastructure.

Additional reading:
• KLIA-East@Labu – an airport in turbulence
• KLIA-East@Labu flying off the radar

• Photo of Dato’ Seri Bashir Ahmad courtesy of Malaysia Airports Holdings Bhd

That's a sensible decision on behalf of the government. I like Singapore airport where the low cost terminal is next door. It's handy if you are planning to connect between terminals.