KLIA east – The rakyat’s terminal??

Just got this in an email from Air Asia…. The Rakyat’ Terminal?? What exactly does that mean, ah????

AirAsia… better explain yourself better before using the Rakyat’s name as another gimmick….

delCapo likes AirAsia… otherwise many of us will not be travelling as much…. BUT, some of the corporate & financial dealings & wieldings in the background are sometimes a little questionable lah…. maybe they can clear the air with this effort…. maybe….

email from AirAsia

Dear Valued Guest,

We at AirAsia and AirAsia X appreciate your patronage in choosing us for your travel. As a regular user of the Low-Cost Carrier Terminal (LCCT) in Sepang, we have heard your concerns and complaints about the cramped facilities at the LCCT. Many of you may not be aware that the terminal is owned, operated and managed NOT by AirAsia but by Malaysia Airport Holdings Bhd., a government-linked company. (YEah, whatever… u guys get to use it for nothing… andaren’t there currently construction still going on to build more stuffs at LCCT?? Government-linked means Rakyat’s money…. going to waste again??)

To help serve you even better, AirAsia – together with Sime Darby Bhd. – proposed to the government that we be allowed to construct and operate a new terminal to cater to the airline’s exponential growth. The Cabinet approved our request for the new terminal – KLIA-East, or as we like to call it, The Rakyat’s Terminal – to be located just a short distance from the KLIA Main Terminal.  (explain… why Rakyat’s terminal?  usng Rakyat’s money??…. or a gimmick to get more people to buy into the project??) The new terminal in Labu, Negeri Sembilan, is scheduled to be in operation early 2011.

In recent days, the proposed KLIA-East terminal has generated a lot of debates and discussions in the media – print, broadcast and online. We appreciate the fact that almost everyone who has voiced their view agrees that AirAsia needs a new terminal. For us, the staff of the airline, the new terminal is very much a matter of the company’s survival given the number of new aircraft joining our ranks – at least two are being delivered every month – and the growth in passengers, estimated to reach 60 million in 2013.

We would like to appeal for your support in helping us deliver on our promises to you and in making The Rakyat’s Terminal a reality. We have set up a designated web site where we will try and clear misconceptions regarding the project and provide answers to questions you may have regarding KLIA-East. Do drop by and have a look. We would also like to appeal to you 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.

For more facts and enquiries on KLIA-East, please log on to www.airasia.com or head on over to the blog.

1 Response to “KLIA east – The rakyat’s terminal??”

  1. 1 air transport enthusiast
    January 16, 2009 at 4:51 pm

    I have been following the air transport industry for over 40 years, ever since when I was a teenager in Malaysia and even until now when I am living in London. Never have I seen so much turmoil , or potential turmoil , in the Malaysian air industry. I know Mr Tony F. has been referring that KLIA East@Labu will not be much further, if any, from Terminal 5 and Terminal 1 in London Heathrow Airport, but the big difference is both terminals in London Heathrow use the same runway and control tower , same train and road highway connecting systems, and KLIA East and KLIA do not. Also, whenever I mentioned to my British friends in London about what Air Asia plans to do, they shook their heads almost saying , “What is Air Asia doing? It is incredibly unreasonable.” In other words, it is “Plane Crazy”. However, it is without doubt the Mr Tony F. cares deeply for his airline and he does have real concerns on how to manage his airline given his dissatisfaction with KLIA and MAHB in accommodating his airline’s growing needs.

    As I have no vested interests in either parties, my views are objective and I do not take sides. For what’s it’s worth, here are my comments:

    1) There are two main parties who are not in good terms with each other – Malaysian Airports Holdings Bhd (MAHB) and Air Asia.

    2) Air Asia moves away because it claims to be dissatisfied with what was being offered , and what may be offered in the future,
    by MAHB.

    3) It is not unusual that the airport operator and the airlines that uses the airport do not always see eye-to-eye. It is evident even here in London between some British/UK airlines and BAA, the owner and managers of London’s Heathrow, Gatwick and Stansted airports. Some of the complaints are similar, the airlines accused the airport operators of not providing the standard of service they were paid to do, and that service charges are too high, etc.

    4) If Air Asia has all it wants from the government and builds KLIA East, it will affect the entire future of aviation in Malaysia, not just in the short term but for many years to come.
    The Malaysian govt. should dictate the National Transport Infrastructure, not Air Asia. THE DOG SHOULD WAG THE TAIL, NOT THE OTHER WAY AROUND !

    5) KLIA, which is already under utilised especially in terms of its runway, will become even more under utilised if Air Asia moves away. It will suffer greatly even in the longer term if connectivity, eg the number of cities it serves so that passengers can connect from one flight to another to fly to another city, will be significantly reduced.

    KLIA, as the main airport of Kuala Lumpur and indeed Malaysia, as a hub will be affected. It is competing with other strong contenters in the region, eg Singapore Changi, Bangkok Suvarnabhumi, Hong Kong Chep Lok Kok airports. The Malaysian govt. should support KLIA, and certainly, it is really unwise to allow KLIA East to be built as this has the effect of making KLIA even more uncompetitive.


    6) The ordinary person on the street in Malaysia should realise that one of the first priorities of any airline is to make as much profit for their company and share holders as possible, at least in the long term. Air Asia is no exception

    If Air Asia ever finds itself in a near monopoly situation on some routes, by “chasing away” routes from MAS, you can almost bet that it will raise its air fares to the level that it will make maximum profit. “Peanut” fares will go out of the window. (I say this by looking at some “budget” fares from European low cost airlines are not always “budget” even though the standard of service is.) In the short term, Air Asia may reduce prices to attract customers, what can be termed as “lose leaders”, but when the market picks up, it will recoup it by raising fares. If it does not raise fares, it will raise profits by making other “stealth” or “hidden” charges. Again, you only need to look at some low cost airlines in other countries including the European Union. A “£1” flight from A to B could end up being like “£50” before you board the aircraft! Malaysians should not be hoodwinked that Air Asia is all good. It is , after all, a trading company, it is not
    a Charity ! It looks after itself and its shareholders before it looks after you, the travelling public !

    6) Air Asia Holdings seems to be following a fairly high risk strategy. Air Asia Holdings, or Mr Tony F., appears to think that by building his own airport and increasing routes, especially long haul inter-continental routes, it will create its own hub from cities around the world and connect those passengers onto Air Asia’s short haul routes. It feels it does not need to cooperate with other airlines to “feed” traffic for its business. It feels going alone is the right answer even in this economically uncertain climate (Most airlines worldwide are doing the opposite, they are either merging or having cooperations with each other ). . In the relatively recent past, similar long haul low cost airlines using similar business model which goes it alone have gone bust – Oasis Hong Kong , and Zoom Airlines. Air Asia , or Air Asia X will be very fortunate to defy that trend. So, let’s say, what happens if Air Asia X is not successful – say what if oil prices rises yet again or demand for long haul flights fall due to the Credit Crunch or something unforeseen happens- where would that leave Air Asia Holdings’s grand plan? What would Air Asia do with the problem of filling its acquired or soon-to-be-acquired 20 or so big Airbus 330 long haul aircraft . And God forbid, what if Air Asia goes bust because of that? What would happen to KLIA East airport? I know no one in the airline would like to think of that, but in the airline world, it can be very unpredictable and chances of an airline failing is not unheard of. No airline is immune from this risk .

    Another big concern is Air Asia and Air Asia X try to grow too quickly and it may encounter problems with great expansion. Air Asia’s regional expansion may not be so worrying but Air Asia X’s growth long haul may have more risks . Examples of airlines in the past that grew too quickly and gone “bust” include Braniff Airlines (USA), Air Europe (from the UK), People’s Express of the USA (Yes, “People”as in “Rakyat”!), and recently Zoom airlines (Canada/UK) . Let us hope Air Asia’s growth is not like some internet bubble , or property bubble because if it is, you know where it led those industries to!

    The Malaysian government ought to take note because Air Asia is now a very important part of the Malaysian transport structure, and it should not be allowed to go “solo” and leave the other parts of the elements and parties that make up the Malaysian national transport infrastructure. Air Asia’s powers should be clipped and its independence reined back so that it works in coordination with the National Transport objectives and in the national interest.


    7) One possible solution for this debacle to be resolved (between MAHB and Air Asia) may be to have a strong mediator. The government has to appoint this mediator. Maybe it can appoint an all-powerful “Transport Czar” with a strong team that has powers to decide in the interest of the nation . He will report directly to the Prime Minister. The Transport Czar must have a clear National Air Transport strategy and objectives.

    He believes that MALAYSIA’S NATIONAL INTERESTS COME FIRST. Not individual parties like Air Asia or MAHB.

    He aims to make KLIA a strong hub as one of his objectives, not weakens it. He should encourage competition between airports in the neighbouring countries, not within the same country especially when they are just 8 kilometres of so apart serving the same city.

    8) The Transport Czar should see that KLIA be similar Singapore Changi, London Heathrow, Frankfurt (Main) , New York JFK airports, where they add new terminals but using the existing runways, etc. KLIA will become an “aero-tropolis”. It is also very important that he ought to address the issues which is of concern from both parties, Air Asia and MAHB. He has to be a diplomat, but a strong one. He will be a good listener too. He will not be bullied by any side.

    The Transport Czar may also be flexible and inventive.

    If the present “marsh” land for the new LCCT at KLIA is of concern to Air Asia, and the Transport Czar is absolutely certain this cannot be fixed in tiime to build the terminal, perhaps he could suggest building additional new “satellite” buildiings that radiates from the main terminal….perhaps one satellite for Air Asia, one for MAS and the existing one for all the other airlines. The Main KLIA terminal may only need slight extension. .

    Another possibility is to built another terminal for Air Asia not on the “marsh” land that concerns Air Asia but on another part of land within the peripheral of KLIA. Different ideas can be thrashed out and a solution can be found but the Transport Czar but the option of building another airport at KLIA East should not be an option.

    To encourage Air Asia to come back into the fold , there should be in place , better , cheaper and faster links created between the different terminals in KLIA to improve connectivity (if the building of new terminals is the option selected) . Maybe a special bus service either with low fares, or even free transfer, can be created, to link between the terminals. Later on, the monorail can be extended to cover all the terminals. MAHB may need to have a kick up the backside (!) and whipped into shape, to improve its performance. There ought to be, if there is not already, regular meetings between MAHB and Air Asia.

    9) In addition Air Asia could perhaps be given restricted access to Subang as MAS has with Firefly. It can have a fixed number of domestic routes from Subang but the bulk of its routes still ought to fly from KLIA. This will immediately ease Air Asia’s concern about not having enough airport terminal capacity at KLIA.

    10) It would be good if the Transport Czar has the power to recommend to Parliament to rescind the permission for Air Asia and Sime Darby to build an airport so close to KLIA, thus potentially damaging the future of the country’s largest airport.

    11) To discourage Air Asia from moving to KLIA East, the Transport Czar could also say to Air Asia that he would advise the government in not providiing the highways and rail links with the new airport KLIA East should ever it be built (if he does not have the authority to rescind permission to build it).

    The Czar may also have another card up his sleeve. In addition, he may say to Air Asia he may advise the government to ask civil servants to use MAS rather than Air Asia . If the Malaysian govt. removes its support for Air Asia, the airline will soon realise that it should start listening to the government. This may get Air Asia to get back work as a team with other parties that make up the Malaysian national infrastructure

    Yet, another card for the Transport Czar is he may liase with Malaysia Airlines. If Air Asia is reluctant to cooperate with the country’s national policy, (as I think the govt still is a big shareholder in MAS) he may encourage Malaysia Airlines to create its own Low Cost Airlines, as Singapore Airlines, Thai Airways, Qantas etc have done. MAS already have FireFly, all it needs is to “beef up” Firefly, give it a few more aircraft including a few Boeing 737s and it can compete quite well with Air Asia. Air Asia may not like to swallow this “bitter pill” and may change its mind.

    As a last resort, the govt. may even buy into Air Asia and become a shareholder in the company.

    12) The Transport Czar should also not ignore the well-being of Malaysia Airlines, the national airline. He should encourage Air Asia to be successful as well as that of Malaysia Airlines. At the moment, it appears Air Asia sometimes is benefitting at the expense of MAS – eg Singapore-KL routes, domestic routes, etc. Both companies should thrive, not one at the expense of the other.

    13)It might be difficult but it would be clearly advisable , and better, if Air Asia and Malaysia Airlines work together, and the Transport Czar should encourage that. MAS could provide the long haul passengers to feed into Air Asia’s short and medium haul routes. MAS and Air Asia, could also coordinate their schedules so that one flight from one airline can smoothly transfer to another. Or transit passengers from Air Asia does not have to check-in again if they fly MAS flights. MAHB, at KLIA, could provide much connection between terminals served by Air Asia and MAS.

    14) The Transport Czar, should also advise the government to agree, if it is not in place already that any airport projects should go through a thorough consultation so that the people of the country have a say. Enviromental issues should also be considered for any major airport development.


    15) I think pressure groups, like Friends of the Earth , should also make their voices heard.

    16) Malaysians citizens, who feel that Air Asia should remain in KLIA , they can also write to their MPs to express their views. In addition, they can write to Mr Tony F of Air Asia and say what you think. If you say you will not fly Air Asia because of what it is doing , I think Mr Tony F. it will make Mr Tony F. think again .

    17) Air Asia can be a great airline. But it should not be acting alone. It should cooperate with other transport parties within Malaysia. It can be a “win-win” situation if everyone cooperates. Otherwise, it can be a very unsatisfactory situation for Malaysia’s air transport future as a whole. The nation cannot afford that.

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