MAHB to beef up non-aeronautical ops

  • Business
  • Thursday, 11 Jun 2015

KUALA LUMPUR: MALAYSIA AIRPORTS HOLDINGS BHD (MAHB) is targeting to grow its non-aeronautical revenue contribution to 60%, managing director Datuk Badlisham Ghazali said.

Its non-aeronautical segment now contributes about 50% of group revenue, he said.

“The Government wants us to grow the non-aeronautical portion for more revenue so that we can be more investment-minded. We would then be able to invest in more digital components like free WiFi in the airports,” Badlisham told reporters on the sidelines of the Global Airport Development Asia 2015 conference in Kuala Lumpur.

MAHB will do this by focusing on three areas – cargo and logistics, a significant portion of the non-aeronautical segment, commercial as well as leisure and entertainment.

“This is encouraged by the Government and the investment figure is in the billions.

“As for the commercial portion of it, these are not just office buildings but activities to support the aerospace industry.

This segment includes training centres, maintenance, repair and operations and human capital for assembly and manufacturing. The commercial segment is time-sensitive, so we need to go through airlines. Cargo planes need this to ship in and out,” he said.

As for leisure and entertainment, which is only being developed now as there was a lower population base near Sepang in the late 1990s, MAHB aims to develop KLIA2 into an airport city.

“Today, airports are not just a transportation hub but a destination. Singapore has done this very well,” Badlisham said.

MAHB can then gradually increase its aero charges, which is 30% lower than its neighbours and apparently the cheapest in South-East Asia.

“We will have to find what that balance is,” Badlisham said.

MAHB will begin beefing up its non-aeronautical activities from the central area to the outskirts.

It is now searching for land in Penang, Kota Kinabalu and Miri to do so.

“Our mindset is not just to maximise value of that space, but to support that location. For instance, we wouldn’t build a carpark just to make money.

MAHB is looking at different business models to up commercial activities such as a hotel, a small mall and even premium shopping outlets, which would support the demographics of that area.

“It could even be petrol stations, if necessary. All these contribute to the growth of the non-aeronautical industry,” he said.

Badlisham said KLIA2’s cost of RM89 per passenger was the cheapest among other countries in the region.

He maintained that the cost overrun of RM2.3bil incurred in the building of the low-budget airlines airport. “The additional cost was not unexpected, as it was in line with the increase in scope. The airport was initially projected to cater to 30 million passengers, but an airport is for the long term,” he said.

“We took on close to RM700mil in development costs for the runways, traffic control system and access roads as we needed the airport up and running immediately. Normally, the Government bears those costs,” Badlisham said.

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