Khazanah owns national carrier Malaysia Airlines and airport operator Malaysian Airports Bhd, both of which would be hurt bad by a rival airport close by, in a small country called Bolehland.
Personally, I oppose the idea too, and here, here and here are the reasons. Reasons given by KLIA mastermind Dr Mahathir Mohamad.
As the controversy develops, we can now see that the real reason why Tony Fernandes wants to build his own (apart from talk of Sime Darby wanting a property play on its land in Labu) is because he cannot get respect from MAB.
He wants to control MAB and how a budget terminal within KLIA is run, MAB said Fly a Kite, you are a small airline.
Tony is big-headed, MAB is large-headed. Baguslah, kasi negeri hancur instead of sitting down and resolving the issue.
Tony has strong cable (I don't have to mention names, surely). He could run all the way to PM Abdullah Badawi to get the issue resolved, but he chose to plan a new airport instead.
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KUALA LUMPUR, Jan 19 (Bernama) -- Khazanah Nasional Bhd, the government's investment holding arm, is not supportive of the plan to build a permanent low-cost carrier terminal (LCCT) in Labu, its managing director Tan Sri Azman Mokhtar said Monday.
He said the National Airport Masterplan should be used as a reference on what should be built for the sake of the country's development.
"Under the masterplan, 10,000 hectares have already been set aside, of which only about a third has been used," he told reporters after presenting Khazanah's annual review here.
He was asked to state Khazanah's stand over the issue.
According to Azman, the airport sector is one where the clustering or network effect is important.
"We cannot have a few airports here and there because then you cannot get the connectivity," he said.
Describing it as a national issue, Azman said: "Certainly we should follow through".
"We have the masterplan and we should go back to that. I am sure that AirAsia and Malaysia Airports can sit down and resolve (the matter) for the country's benefit," he said.
When building the airport, they should have software and hardware connectivity to enable seamless travel, Azman said.
"We are shareholders of Malaysia Airlines, we always maintain that both MAS and AirAsia can co-exist so that everybody can benefit," he said.
"In short, we do not support the Labu project. We should stick to the National Airport Masterplan as a lot of resources had been put in," he added.
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The Straits Times, Singapore. Jan 20, 2009.
Turbulence hits AirAsia's airport plan
By Leslie Lopez
South-east Asia Correspondent
KUALA LUMPUR: - The controversy over a plan by budget airline AirAsia to build its own airport is exposing a major problem that ails corporate Malaysia - how the dominance of state-controlled agencies often stifles entrepreneurship.
The wrangling also highlights the government's inability to rein in poor- performing public enterprises and pursue policies to maximise the use of resources, economists and bankers say.
Unless the government moves quickly to resolve the public feuding between state-controlled airport operator Malaysia Airports Bhd (MAB) and AirAsia, it could undermine the country's tourism sector.
'Especially in these times of crisis, the issue is how well does the country maximise its resources. Building a new airport to resolve this squabble isn't the solution,' said a CEO of a local stockbroking firm.
AirAsia, one of Malaysia's more successful private entities, says the current low-cost terminal located near the Kuala Lumpur International Airport (KLIA) in Sepang would not be able to cope with passenger and fleet growth by 2013.
AirAsia's aggressive chief executive Tony Fernandes predicts that the airline will handle 60 million passengers in four years' time and have a fleet of 184 aircraft.
He also says that MAB's plans to expand its facilities in KLIA will not be completed in time.
Since it would not have any say in the new facilities that MAB intends to build, AirAsia fears that landing and other charges could rise. It thus announced a plan to build its own airport to keep expenses low.
Prime Minister Abdullah Badawi's Cabinet had given AirAsia the green light for this new airport at Labu in Negeri Sembilan, roughly 8km away from KLIA. But that is just part of the story.
AirAsia had tried to negotiate a better deal with MAB, but why the latter did not try hard enough to keep its major customer happy remains a mystery. There are suggestions that the problem may be with MAB's main shareholder, government investment fund Khazanah Holdings. AirAsia's rapid growth has partly come at the expense of national carrier Malaysia Airlines, in which Khazanah holds a majority interest.
In recent weeks, Khazanah officials have lobbied senior Finance Ministry officials to get the government to review its decision on the Negeri Sembilan airport.
But this has received mixed reactions.
While proponents of Khazanah say that it is merely protecting its investments in MAB and Malaysia Airlines, others believe the investment agency is crowding out private enterprise. Khazanah dominates the national economy with controlling stakes in dozens of companies, such as transportation, medical services, finance, property and utilities.
Economists have long argued that this domination has led to inefficiency in policymaking, which is often skewed in favour of government-linked entities.
The turf war aside, there are strong arguments against a new airport. Detractors of the proposal say the KLIA was purpose- built to allow for another three satellite terminals. A new airport would also mean additional expenditure for transport infrastructure and duplication of resources.
What Datuk Seri Abdullah's administration ought to do is to play the role of referee effectively, analysts say.
If the government is of the view that a new airport would be a waste of resources, it should get MAB to negotiate with AirAsia, even if it means giving the latter wide autonomy to operate within KLIA. Under such an arrangement, the government would be able to protect its investment in the airport operator and at the same time allow AirAsia to grow profitably.
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4 comments:
How can Pak Lah play referee when the bait says "KLIA will be renamed after Mahathir after he is gone but we are offering you a bigger one"?
Wonder how many cabinet minister fall off their seats upon hearing this? If none obviously they were all as asleep as the boss.
Hail to "Angkasapuri Abdullah Fahim"
Bro Reme,
Leslie's article is a bit skewed towards Air Asia lah. Everybody knows that Tony F doesn't want to pay anything, and wants free this, and free that. He owes MAB money, and he doesn't want to pay the duit rakyat yang dia hutang. And Leslie calls this `stifling enterpreneurship'?????
In the words of Tony F to journalists who doesnt want to kowtow to him... `how much did Tony pay him ah'???
Anonymous, former BH reporter,
the willingness to listen to the other side of an argument is so precious we will only miss it once it is gone.
so even if there is disagreement with what leslie said, there ARE people out there who thinks khazanah, mab want to stifle entrepreneurship by holding him back.
i disagree with the planned Airport LabuLabi (my name for it) because i think it will kill klia in my adopted country, is unsafe because there will be two control towers with overworked controllers, and a wastage of funds. i may be wrong of course, so let us hear the other side.
Tony loves football (MU sponsorship - which was paid by another entity, though AirAsia put up its identity everywhere for MU).
And he also leves changing goalposts!
Set up a new company to operate Rural Air Services in East Malaysia and got advanced subsidies. Operations almost came to a halt due to superb management and cannibalising of aircraft parts - as well as not paying up for aircraft maintenance by third party.
He whined and whined and the governent paid up when returning the operations to the national carrier.
Tony was bothered?
Not at all - he got the subsidy and on top of that made the government pay up for dues owed by AirAsiaX for aircraft maintenance.
His next announcement - AirAsiaX to go international.
History has recorded how this outfits K.L/Perth inaugural flight took off.
Now this airline is selling tickets to London - subject to regulatory approvals.
He cares if regulatory approval is coming or not?
Why should he, when he has collected advance payments aplenty and is now making use of this money for other matters?
He also whined and whines about Subang - even when the Subang Skypark project was given to another company, he still was begging for it to be given to him.
And even when the Labu airport project was being debated, he made reference to 'preferential treatment' given to Firefly - a turbo prop operator, unlike AirAsia which is a jet aircraft operator.
Now he also has lobbied for his own terminal in Penang - but using same runway.
He could have used same approcah with the KLIA operator but no, Sime Darby is very 'intelligent' enough to buy his idea of a totally new airport. SD has enough cash to spare, at the expense of the rakyat?
By the way, he is also a 'visionary' who knows that even when Labu airport is operating, his Tune Hotel being built in KLIA LCCT will still show positive performance in the years to come.
Is theer any award in Malaysia to honour this kind of 'wise' thinking fellow who is actually a showcase of Malaysia Boleh internationally?
Please, please, give it to him and the MSM in Malaysia - please front page this fellow as many times as you can for his novel methods of playing the game according to the rules.
ANOTHER MALAYSIAN
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