Malaysia Airports to give cash incentives

SUBANG: Airport operator Malaysia Airports Holdings Bhd (MAHB) will give incentives in the form of cash to airlines that continue to bring in additional passenger traffic to Malaysia.

“We are being pro-active in supporting airlines and we are still in discussions with some airlines on the matter,’’ MAHB managing director/CEO Tan Sri Bashir Ahmad told StarBiz.

The quantum of the monetary incentive is still unclear but Bashir is looking to announce details before the year is out.

Giving monetary incentives is not uncommon in the global aviation landscape but making it transparent is. Dishing out incentives in the form of money is the industry’s best kept secret.

It is learnt that even Singapore’s Changi Airport does it, with the size of the monetary award in proportion to the number of passengers brought in.

The suggestion to reward airlines in search of new growth by MAHB appears to be timely as it will not just make airports in Malaysia more competitive but also allows them to attract more airlines to operate in the country.

It also helps airlines that are struggling due to the economic downturn.

This monetary incentive proposal is being considered despite the fact that Malaysian airport charges are already the lowest in the region.

Such a move may cause a slight dent to MAHB’s bottom line, but the impact is expected to be minimal.

However, the decision could translate into more frequencies and destinations, although it might be a long shot.

There are now 54 airlines servicing KL International Airport (KLIA) with Bashir expecting two more airlines to operate from KLIA by year-end.

Last year, the total passenger volume at the 39 airports that MAHB operates in the country rose 5% to 47.45 million.

This week, the airport operator revised its targeted passenger growth for this year to 3%-4% in light of the increase in tourist arrivals.

The new cash incentive is meant for all airlines that operate from the country and from all the 39 airports in Malaysia, but it is for new business only.

All the existing incentives will also remain intact, such as the waiver for landing charges for new flights for three years.

This is over and above the 50% discount given for two years from April for existing flights.

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Related Stories: Malaysia Airports raises forecast for passenger traffic Malaysia Airport expects 3%-4% growth in passenger volume Malaysia Airports in talks on airport management in M-East

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