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January 31, 2009

Malaysia: Airport operator to build budget terminal
Malaysia Airports Holdings, the country's sole airport operator, plans to build a low-cost terminal, newspapers reported on Saturday, a day after reports that budget airline AirAsia's proposal to build an airport was scrapped.

AirAsia had planned to build and run its own airport in the central state of Negri Sembilan because in its view the budget carrier terminal at Kuala Lumpur's airport would not be able to handle future passenger growth, reported Reuters.

But the 1.6 billion ringgit ($444 million) project, which would be the fourth airport in the Malaysian capital, attracted criticism from various quarters, including state investment arm Khazanah and former Prime Minister Mahathir Mohamad.

On Friday, sources told Reuters the AirAsia plan had been scrapped by the government.

The New Straits Times quoted an unidentified source as saying that Malaysia Airport Holdings would instead build a budget terminal near the existing one at Kuala Lumpur airport.

The company could not be immediately reached for comment.

However, AirAsia's airport fees may be lowered -- something the airline had been complaining about, according to a source.

AirAsia said late on Friday that a meeting chaired by Deputy Prime Minister Najib Razak had been very positive but gave no details.

A decision will be announced in two to three weeks, state news agency Bernama quoted Transport Minister Ong Tee Keat as saying.

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