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Tuesday, December 6, 2011

MAHB insists AirAsia lobbied for powerful baggage system

December 06, 2011

KUALA LUMPUR, Dec 6 — Malaysia’s main airport operator revealed correspondence last night to prove that AirAsia had pushed for a fully-automated baggage-handling system (BHS) that is causing the delay for the new budget terminal in Sepang.

Malaysia Airports Holdings Berhad (MAHB) pointed out that a total of 47 meetings have been held with AirAsia since April 2010 until today “to discuss and address all of AirAsia’s requirements” for the terminal named KLIA2.

“The full agreed minutes of these meetings will better reflect the detailed discussions held between both Malaysia Airports and AirAsia on the development of KLIA2,” MAHB said in a statement.

Earlier yesterday, AirAsia refuted claims it had lobbied MAHB for a “bigger KLIA2” and provided letters to prove it should not be blamed for the nearly-doubled price tag of the new low-cost carrier terminal.

Among others, the budget carrier had denied MAHB’s claim that it had asked for a fully-automated BHS, which is believed to have caused delays in construction, referring to a letter where it had instead asked for a semi-automated BHS.

“The MAHB board had unilaterally decided on a fully-automated BHS to accommodate for 45/60 million passengers, which was again not agreed by AirAsia,” it said.

To refute its top client’s assertion, MAHB attached two letters to its press statement — one from AirAsia CEO Tan Sri Tony Fernandes dated June 16, 2011; and another letter in response from MAHB managing director Tan Sri Bashir Ahmad Abdul Majid on October 10, 2011.

In the first letter, Fernandes had mooted three options to MAHB for the BHS at KLIA2 but had expressly urged MAHB to implement “option 3”, the “dual tray tilt sorter with full connectivity”, which is a fully-automated BHS.

File photo of construction work going on at KLIA2. — Picture by Jack Ooi
He admitted that selecting the most powerful BHS system may have certain impact on the current work at the airport but stressed that “the evolving nature of our business requires a high level of strategic agility for our continued growth and success”.

Fernandes also listed AirAsia’s growth projections, saying that estimated passenger traffic would likely hit 28.7 million in 2015, 45.3 million in 2020 and 60.3 million in 2025.

“We trust Tan Sri (Bashir) will understand and support AirAsia’s decision, since it will result in significant benefits to AirAsia, MAHB and the nation as a whole,” Fernandes signed off in the letter.

In the second letter penned to Air Asia X chairman Tan Sri Rafidah Aziz, MAHB explained that after Fernandes’ letter, a meeting was held between all parties on July 1 to discuss the proposal for the fully-automated BHS.

“MAHB had highlighted during this meeting that with the current progress of the development of KLIA2 reaching almost 40 per cent as per the completion timeline by October 2012, any material change in the BHS system would most certainly impact the completion date of the project,” MAHB said in the letter.

It then explained that a modified version of “option 2” was later agreed on whereby certain features from the powerful BHS system would be incorporated where possible.

However, MAHB said, in its board meeting on July 4, directors had expressed concern that AirAsia may change its position in the future on the BHS and would, by then, be too difficult to accommodate such changes.

“The board of directors then decided to proceed with ‘option 3’, which is in line with AirAsia’s (original) request to ensure a powerful BHS, which has the capacity and flexibility to support AirAsia’s continued growth and development over the long term,” MAHB said, adding that the decision was later conveyed to the carrier in another meeting two days later.

When the finger-pointing between the two parties hit media headlines, it was Fernandes who first rubbished MAHB’s justifications for doubling the cost of KLIA2, saying that increasing the terminal capacity from 30 million to 45 million passengers made little sense as it would make it larger than “the whole of Singapore’s Changi Airport”.

But MAHB shot back with a rebuttal, saying yesterday in an article on its website, titled “Why KLIA2 has to be bigger?”, that AirAsia had been the one to estimate that passenger traffic at the new terminal would reach 28.7 million by 2015, 45.3 million by 2020 and 60.3 million by 2025

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