Labu LCCT ownership structure ready by April

Friday January 9, 2009

SEPANG: AirAsia Bhd expects the ownership and financing structure for the proposed low-cost carrier terminal (LCCT) at Labu in Negri Sembilan to be finalised by April, said group chief executive officer Datuk Seri Tony Fernandes.

“We are in talks with several domestic and international investors who have expressed interest in financing the project,’’ he told reporters yesterday in a briefing on the project, to be known as KLIA East.

He did not name the potential investors.

Sime Darby Bhd was recently given the nod by the Government to build the low-cost terminal at Labu, which is estimated to cost between RM1.6bil and RM2bil.

Datuk Seri Tony Fernandes briefing the media near the proposed site of the new low-cost carrier terminal on Thursday.

Sime Darby will provide about 3,000 acres of land which will house a terminal building that can cater up to 30 million passengers a year.

The facility can be expanded to handle 50 million passengers with two runways.

The Labu site is 50km from Kuala Lumpur and 18km from KLIA.

If all goes as planned, the terminal will be completed by 2011, at a time when AirAsia’s passenger capacity will be much higher than the 10 million it handles at the current domestic LCCT.

AirAsia handled about 20 million passengers last year, taking into account its operations in Thailand and Indonesia, and that of sister airline, AirAsiaX.

By 2013, it expects to fly 60 million passengers per year, when it will have 159 narrow-bodied and 25 wide-bodied aircraft.

“By 2013, only Japan Airlines will be bigger than us in terms of passenger numbers. We would be the second biggest airline in Asia by 2030,’’ Fernandes said.

That was why AirAsia needed a new terminal as the existing terminal’s capacity at LCCT, which is being expanded to handle 15 million passengers annually, would not be able to handle the projected growth, he said.

Fernandes said the airline had seen 13 sites but found the Labu location ideal.

“The key thing is that we cannot slow down our growth because we have bought aircraft and we need a bigger terminal. We are building for 30 million passengers and we should be supported,” he said.

By having a dedicated terminal, Fernandes said the airline could bring down its cost by 20% and this would be translated to lower fares.

Asked if other airlines would be able to use the KLIA East airport, Fernandes said “the idea is not to go into (the) airport business but to serve our business.’’