AirAsia Refutes MAHB's Claim That It Asked For A Bigger KLIA2

KUALA LUMPUR, Dec 6 (Bernama) -- The feud between AirAsia Bhd and Malaysia Airports Holdings Bhd (MAHB) took a turn for the worse when the low-cost carrier Monday refuted claims by the airport operator that AirAsia was the main reason for the cost of the new low-cost terminal, or KLIA2, to increase substantially. In a statement here Monday, the low-cost carrier also said it did not ask for a bigger KLIA2. AirAsia has called for a press conference Tuesday at its headquarters in Sepang to refute MAHB's claims of asking for a bigger KLIA2. The budget carrier also provided copies of two official letters sent by AirAsia to MAHB and vice versa to prove that it should not be blamed for the price tag of KLIA2 to almost double. AirAsia, MAHB's biggest customer, said its chairman, Abdul Aziz Abu Bakar, had in a letter on November 2009 to MAHB managing director Bashir Ahmad Abdul Majid, cautioned that the location of KLIA2 at KLIA West was not suitable and would cause construction costs to soar. "The site will definitely be more expensive than the planned budget of RM2 billion," AirAsia said, adding it had also estimated for MAHB that the construction cost will increase to RM3.6-RM3.9 billion (US$1.14 billion to US$1.24 billion). In a separate letter dated Aug 9 this year, Bashir had written to AirAsia X chairman, Rafidah Aziz, claiming that the proposed KLIA2 would be sufficient to handle 30 million passengers per annum. "This figure has never been officially changed by AirAsia or MAHB since Aug 9, 2011," AirAsia said, in refuting claims made by MAHB in an article entitled "Why KLIA2 has to be bigger" posted on its website. According to the article, MAHB claimed that AirAsia had been the one to estimate that passengers per annum (ppa) at the new terminal would reach 28.7 million by 2015, 45.3 million by 2020 and 60.3 million by 2025. AirAsia chief executive officer, Tony Fernandes, had also dismissed MAHB's justifications for doubling the cost of KLIA2 from its original RM2 billion (US$637.95 million) estimate in 2009 to RM3.9 billion currently. AirAsia had mentioned in a letter that the airline should not be held accountable for cost over-runs arising from the incorporation of these needs. The airline also refuted MAHB's claim that it had asked for a fully-automated baggage handling system (BHS), which is believed to have caused delays in construction, saying it had only asked for a semi-automated BHS. "The MAHB board had unilaterally decided on a fully-automated BHS to accommodate 45-60 million passengers, which was again not agreed to by AirAsia," it said. AirAsia said its request for a 3,000-metre runway had been based on its original requirement to MAHB to cater to the wide-bodied Airbus A330 aircraft, which were operated by Air Asia X. Later, the airline said, MAHB has since shortened the runway length to 2,750 metres, which can only cater to the A320 aircraft, without consulting AirAsia. "As such, this should not be considered as an additional request/requirement from AirAsia as the original plan has always been for a 3,000-metre runway. "Therefore, no additional cost should be incurred," it said. In a response just hours later, MAHB released two letters, one written by Fernandes to Bashir, and another from Bashir to Rafidah, containing correspondence showing that AirAsia had agreed to a fully-automated BHS. According to the letter, Fernandes said this was because the low-cost carrier had developed a new state-of-the-art passenger and baggage check-in system, which would be rolled out at the new LCCT2 (KLIA2). He had also said in the letter provided by MAHB that AirAsia's passenger growth would continue well beyond 30 million passengers to levels as high as 50-60 million passengers. He had also said that within less than five years of opening day (2017), "our projections will be in excess of 35 million ppa." As late as October 2011, Bashir had in a letter to Rafidah providing further clarification on the decisions made regarding the BHS, said that MAHB's board of directors had decided to proceed with Option 3, i.e. a fully-automated BHS, which was in line with AirAsia's request to ensure a powerful BHS. Such a system would have the capacity and flexibility to support AirAsia's growth and development over the long-term. Bashir said that MAHB had conveyed the board's decision to AirAsia. Turning to AirAsia's press release earlier, MAHB said a total of 47 meetings have been held between MAHB and AirAsia since April 2010 until now to discuss and address all of AirAsia's requirements. -- BERNAMA