Malaysia’s government has rejected an ambitious proposal by budget carrier AirAsia to build a US$460 million airport outside the capital, a top government official said.
AirAsia founder Tony Fernandes said earlier this year that AirAsia wanted to abandon its rudimentary and overcrowded terminal next to the main international airport, to improve its standards and lower its operational costs.
But newspaper reports said the plan was turned down on Friday after Fernandes made a presentation to Deputy Malaysian Prime Minister Najib Razak and senior officials from the Finance Ministry and airports authority.
AirAsia intended to build and operate the airport in Negeri Sembilan state — outside the capital Kuala Lumpur — together with Malaysian conglomerate Sime Darby.
But Najib, who is also finance minister, told Fernandes that the government had to reject the proposal, a government official familiar with the negotiations said on condition of anonymity.
“The government thinks the AirAsia airport plan is not a viable project. It fears the cost of the construction may escalate and it may be forced to inject funds. The government does not want the project to be a burden,” he said.
However, he said that AirAsia could still appeal to the government to reconsider its decision. AirAsia officials could not be reached for comment.
The New Straits Times on Saturday cited an unnamed source as saying that Malaysia Airports Holdings would instead build a new budget terminal to replace the existing facility near Kuala Lumpur International Airport (KLIA).
“Malaysia Airports will build a new low-cost carrier terminal near the Kuala Lumpur International Airport but they [Malaysia Airports] will have to work closely with AirAsia,” the newspaper quoted the source as saying.
“The company’s [AirAsia] input in the building of the new terminal will have to be taken into consideration,” the paper said.
However, Transport Minister Ong Tee Keat was quoted by the Star newspaper on Saturday as saying that a decision on AirAsia’s new airport would be made only in two or three weeks’ time.
“Actually the government has not made a decision on the matter,” he said.
Sime Darby had previously said it had won government approval to begin the airport project, which was to be the centerpiece of a new multi-purpose development at Labu in Negri Sembilan state.
“The new airport, which will be known as KLIA East, will provide more capacity for aircraft and passengers and enable us to bring down fares,” Fernandes told a press conference early last month.
“We believe in lowering our business costs. It is the key to our success,” he said, adding that costs could be cut by 30 percent.
Fernandes rejected criticism that KLIA has more than enough capacity to handle AirAsia’s growth plans and that the sprawling city has no need for what would be its fourth airport.
He said the new airport would be exclusively for AirAsia, and designed to handle up to 30 million passengers annually.
Construction could begin within six months with a completion date of March 2011.
An expansion of the current low-cost terminal is due to be completed by next month, but by then AirAsia will already have exceeded its enlarged capacity with some 15.7 million passengers a year.
Even with a completely new LCCT terminal, KLIA’s runways cannot accommodate AirAsia’s expanding fleet that will include a larger number of wide-bodied jets, Fernandes said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS