AirAsia wants tenancy contract for KLIA2

December 06, 2011

File photo of an artist’s impression of KLIA2 when completed.

SEPANG, Dec 6 — AirAsia says it wants a contract from Malaysia Airports Holdings Bhd (MAHB) for KLIA2 to ensure a minimum level of service from the airport operator and to avoid arbitrary airport charge hikes in future.

AirAsia commercial director Jasmine Lee said a service level agreement (SLA) would ensure MAHB was accountable for service quality at the new terminal and allow the airline to make more accurate cost projections.

She pointed out that there was no SLA in place at the current low-cost carrier terminal (LCCT), just conditions of use.

“It’s like renting a house and the landlord is not giving you a tenancy agreement,” she told reporters at the airline’s office here.

“AirAsia is the victim here because we can be charged anything, anytime they want... We can’t hold them accountable for anything at all so we’re at their mercy.”

AirAsia regional regulatory and airports head Ashok Kumar said the airline had not received any response from MAHB on the SLA for the new terminal despite several requests, with the most recent filed about a year ago.

But, he added, the two parties were still in negotiations and declined to say if AirAsia would refuse to move to KLIA2 in the event no SLA is provided.

Lingam (centre) sharing a light moment before the AirAsia press conference on December 6, 2011. — Picture by Yow Hong Chieh

Today’s press conference, attended by AirAsia department heads and its chief operating officer Bo Lingam, was called in response to MAHB’s most recent salvo in the increasingly acrimonious dispute between the airport operator and its biggest client.

MAHB yesterday rebutted AirAsia’s claim the budget carrier was not responsible for the higher cost of KLIA2, which has nearly doubled to an estimated RM3.9 billion from RM2 billion.

The airport operator said this was due to requests from the carrier as late as June this year to up passenger capacity to 45 million passengers per annum (PPA) from 30 million previously.

MAHB had also said AirAsia’s decision to switch from a semi-automated baggage handling system (BHS) to one that was fully-automated had pushed back the completion date of the new terminal by six months.

KLIA2 is now expected to be completed only in April 2013.

But AirAsia reiterated again today it did not ask for a larger terminal and a more powerful baggage system in line with its own projections that some 45 million PPA would be using KLIA2 by 2020.

Lee stressed that the decision to go with a fully-automated baggage system was made unilaterally by MAHB without any input from AirAsia.

She said MAHB had gone ahead with the budget carrier’s original request in June for a fully-automated BHS despite AirAsia settling for a modified semi-automated setup subsequent to that.

MAHB said its board of directors made the decision on July 4 to proceed with a fully-automated BHS after AirAsia had changed its mind on concerns that the airline would change position again in future, when it would be too difficult to accommodate such changes.

Lee said that all delays and additional costs to KLIA2 could be put down to the lack of a joint committee between the two parties, which would have set out the right requirements for the terminal “from Day One”.

The public finger-pointing between the two parties began when AirAsia boss Tan Sri Tony Fernandes rubbished MAHB’s justifications for the increased cost of KLIA2 on micro-blogging site Twitter on November 29.

He said increasing the terminal capacity to 45 million PPA from 30 million made little sense as that would make it larger than “the whole of Singapore’s Changi Airport”.

Since then, AirAsia has embarked on a campaign to get members of the public to lobby MAHB to keep airport taxes low, following a rate hike critics have linked to the bloated cost of KLIA2.