PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB) said it has been playing a crucial role along low-cost carrier AirAsia Group in supporting and boosting the growth of low-cost travel in Malaysia and will continue to do so.
“While Air Asia, the home-grown carrier, has been the principal driver for this growth, the Malaysian government along with MAHB have both played crucial roles as enablers by fully supporting low-cost travel for the benefit of all Malaysians. This not only emphasises our commitment and support for low-cost travel, but more so our conviction that this will take us to the next level of growth in air travel demand,” MAHB’s acting group CEO, Raja Azmi Raja Nazuddin, said in a statement today.
From the onset, he added, MAHB understood what it took for low-cost travel to be successful and would continue to support it.
The airport operator noted that it has implemented three incentive programmes, namely Airlines Recovery Plan to assist airlines to recover from the global financial crisis between 2009 and 2011, Airlines Incentive Programme (I), and Airlines Incentive Programme (II) between 2012 and 2017 to reward airlines for growth.
Up until 2017, AirAsia had benefited some RM367 million from the incentive programme in tandem with the significant growth it had enjoyed.
According to MAHB, low-fare travel in the country has increased by leaps and bounds over the last decade, constituting 25% and 50% of total travel in Asia and Malaysia respectively, and is expected to increase further.
AirAsia has experienced a compounded annual growth return of 11.6% over the last 10 years.
At the time when the true growth potential of low-cost travel was still uncertain, MAHB said, it took a bold step of investing close to RM360 million in building and expanding the first low-cost terminal in South East Asia from 2006 up till the opening of klia2.
The government had also given special consideration in terms of lower passenger service charges for the old LCCT and klia2 up until recently when it was fully equalised this month.
Noting that klia2 was the ultimate embodiment of MAHB’s pro-growth approach to support and enable the growth of low-cost travel, it said the LCCT, the former base of AirAsia, was meant to be a temporary solution to meet the immediate requirements of AirAsia then, and to provide the airline ability to grow to its full potential.
MAHB said it not only took into consideration the significant evolution of the low-cost carrier’s business model, but also catered to any anticipated changes that may occur in the coming decades while developing klia2.
With budget airlines evolving from the initial point-to point-destinations using narrow-bodied aircraft to multiple destination transfers with bigger aircraft, it stressed that airport infrastructure must be enduring in its design and capacity to ensure that it can cater to the ever-changing variants of airline business models while also being able to cater for long-term growth and effectively meet the needs of all its stakeholders.
Source: The Sun Daily