PUTRAJAYA: The Transport Ministry wants to upgrade duty-free outlets at the KL International Airport (KLIA) to make them more competitive.
Minister Datuk Chan Kong Choy said a study, based on the management of similar outlets at several major airports including London and Dubai, was being conducted.
The ongoing study is aimed at improving the management of such outlets at the KLIA. This is a long-term effort to ensure that the industry can better withstand future challenges.
We are collecting information from major airports around the world for comparison.
Once we have done that, we will prepare a Cabinet paper on new policy for the industry, he said after his ministrys weekly post-Cabinet meeting here yesterday.
He said the Cabinet was also informed that Malaysia Airport Holdings Bhd had scrapped its plan to open tender on renewing the rental for all 76 duty-free outlets at KLIA.
Instead, he said, the present tenancy agreements would be automatically extended for another two years as part of efforts to help the traders offset a loss in revenue suffered during the first half of the year due to the war in Iraq and the SARS outbreak.
It was reported that duty-free outlets suffered at least a 40% drop in sales in the first four months of the year because of a severe drop in arrivals at the airport.
The five-year tenancy agreements of outlets at KLIA given out in 1998 are due for renewal this year. Chan said the rental and other conditions of their tenancy would remain the same for the next two years.
He said the latest move, which also saw the rental of such outlets being slashed by 50% until the end of the year, was part of the economic stimulus package recently announced by the Government.
He said there were no plans to extend the 50% rent reduction beyond December.
On his experience in attending his first Cabinet meeting, Chan who assumed the post on Tuesday, said: It was a very good learning experience.
He said he had attended exco meetings when he served in the Pahang Government.
But it is not the same. There were only eight exco members at that time, said Chan.
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