Klia2, Airasia, airport towns

Yesterday, LCCT closes and KLIA2 grew suddenly. From a few hundred passengers per day since 2nd May, it will now handle maybe 25 Million passengers this year of 2014 or more, hopefully. I always love it when all these largest meets largest. Largest low cost terminal meets largest low cost airline. The result would only be good for the airport, the airline and everything related to it. LCCT tried its best until it was overwhelmed two years ago and this year, if you happen to visit LCCT, finding even a place to sit would be tough. I had to use 45 minutes to park my car when I had to pick up my wife from LCCT few months ago! Let’s now see how far KLIA2 would take the growth of passengers since it was built for up to 45 million passengers per year.
Next we look at what Air Asia CEO of Malaysia, Aireen Omar said when asked if Air Asia will increase its manpower since KLIA2 means much higher potential increase in number of passengers. ‘We would look at the increase in productivity, employees would need to be multi-tasking and working even smarter in order to maximise their efficiency.’ Many would said, this means overworking the employees but to me, this meant that the strategising and planning in Air Asia pretty much sums up to tell us that cost efficiency is everything in the airline business. Many traditional airlines are struggling to compete due to this. Every additional staff adds to the fixed operating costs and during slowdown, it exposes the airlines to immediate losses with the lower passenger volume.
Last we look at MAHB which hopes to build cities around the Kuala Lumpur International Airport (KLIA). This is because it is the way forward for many airport operators around the world and also the latest concept. It has around 10,050 ha in Sepang which has the KLIA, LCCT, Sama-sama hotel, airline cargo area and the latest KLIA2. A lot of the land were palm oil plantation which has given the airport satisfactory yearly profits. Now, with the maturing of the surrounding areas, commercial development would allow MAHB to grow its revenues further. First venture was the Gateway@klia2 at klia2, which is a 70:30 joint venture between MAHB and WCT Holdings Bhd. Read it here: Gateway@KLIA2

If we look at these three new developments, we can see that their successes are all inter-related. Some would say planning could have been better but the truth is, no matter how successful you were or how bad you failed, everything can only be better for those who look back. I certainly hope that KLIA2 would grow so fast that in 5 years time, KLIA3 is needed. I also like the efficiency model of Air Asia and I hope more Malaysian companies think of this cost efficiency model and not just largest, highest, tallest, biggest or whatsoever. As for airport cities, there are already examples around the world to learn from. Do it right and make it count MAHB. All the best.
written on 10 May 2014
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