AirAsia-MAB tussle threatens Sabah tourism

The Sabah government must decide whether or not it wants Air Asia and the business it will bring by turning Kota Kinabalu into a hub for north Asia and Australia flights.

KOTA KINABALU: Travelers to and from Sabah are set to pay the price for the battle between budget carrier AirAsia and Malaysia Airports Berhad (MAB) over what facilities they must use.

AirAsia wants to continue using low cost Terminal 2 and keep fares down.

But  MAB and the Transport Ministry want them to use the Kota Kinabalu International Airport (KKIA) which would increase their costs and force them to pass it on to travelers.

So far the state government has stayed out of the tussle that is set to impact the local economy.

Tourism, Culture and Environment Minister Masidi Manjun said the matter is between AirAsia and MAB even though the repercussions could lead to disastrous consequences for the state’s fledgling but lucrative tourism sector which is proving to be a mainstay of its economy.

Further muddying the waters was Sabah Parks chairman Tengku Zainal Adlin who said both airline and state needed each other.

Adlin said he understands that AirAsia is a business entity and can only exist if it makes a profit but it “must also take a national approach to the issue.”

Tourism brought in RM6.38 billion to the state last year before taxes.

But critics are questioning the failure by the state government to make a clear stand on such an important issue.

AirAsia is seen as the goose that is laying the golden eggs for Sabah tourism and shortsightedness could kill it off altogether.

PKR Sabah chairman Lajim Ukin argued that the budget airline should be allowed to retain its operations at Terminal 2 as it benefits the state.

‘We will pull out’

AirAsia Chief Executive Officer Tony Fernandes said the airline would not make the airport here its hub if they are no longer allowed to operate from where they are now.

He said the proposal to move its operations to Terminal 1 of KKIA from Terminal 2 was not feasible.

“This is not a threat but it is uneconomical because the shift will see passengers paying double the airport tax and these days every sen counts to the consumers.

“We will pull out, we will take our planes somewhere else. It won’t work,” he told reporters when asked what he would do if the airline is forced to go to Terminal 1.

Lajim agreed with his argument and said both the federal and state governments should look after the interests of the people and allow the budget airline to retain its operations at Terminal 2 as it hugely benefits the state’s economic and tourism growth.

The Sabah Progressive Party (SAPP) also weighed in on the issue and questioned the state government’s lack of stance on the issue.

Its president Yong Teck Lee, a former Sabah chief minister, said the state government must not  shy away from making its stand known,

The Sabah government, he said, is answerable to Sabahans and to the Sabah travel industry, whereas Fernandes is answerable to his shareholders.

“So far, Air Asia CEO (Tan Sri) Tony Fernandes seems to be the spokesman for the Sabah government and the Chief Minister,” scoffed Yong.

One option to end the near monopoly held by AirAsia on cheap flights to Sabah would be to adopt an open sky policy, he said.

With more airlines from more countries enticed to service the Sabah travel industry, travelers would also have more options, he added.

Need for monorail link

Yong said the relocation of budget flights to Terminal 1 was appropriate.

He said Terminal 2, as an international terminal, is “unwelcoming” to visitors due to poor facilities.

But these may be considered luxuries by budget travelers looking for a bargain.

Yong cited a host of problems at Terminal 2 from lack of space to lack of facilities, but critics say many of these are not due to poor infrastructure but rather due to mismanagement as well as cultural failings where facilities are consider luxuries and not necessities.

Yong said the government should also favorably consider AirAsia’s proposal to build their own Low Cost Terminal 2.

He also suggested a monorail internal link between the two terminals.

At the moment, passengers connecting to or from Air Asia and other airlines have to spend RM30 extra on taxi fares shutting between the two terminals.

Currently the airport tax for domestic flights at Terminal 1 is RM9 and RM6 for Terminal 2 while for international flights the charges are RM65 and RM32 respectively.

Fernandes said he believed that moving to Terminal 1 of KKIA would make the main terminal overcrowded, with passengers and aircrafts, and this could hinder their expansion plans.

He said the idea of bringing AirAsia X – its long-haul affiliate – to Sabah had been put on the back-burner for two years due to the airport terminal issue.

Fernandes claimed that the airline currently carried about six million passengers annually and he wanted to double that in the next five years.

Such numbers would have the potential of creating jobs and economic development via AirAsia X and the airline would then be willing to invest if the airport authorities give them a low cost facility, he said.

Musa supportive

Fernandes said he had met with Sabah Chief Minister Musa Aman this week on the matter and he had been responsive towards their proposal of either expanding Terminal 2 or finding a new place for their future operations.

“Personally I like to develop Terminal 2 as with the Tanjung Aru eco-development being planned there, it makes sense to have a big terminal right by,” he said of an ambitious state-driven plan to give the iconic beach a facelift on a near 300ha plot adjacent to the terminal.

“In the session with Musa explaining our plans, I think we are credible because we have delivered everything we have said we would do.

“The Chief Minister has always been a fantastic supporter of AirAsia from the beginning, that’s why we are very strong in Sabah,” he had said.

AirAsia currently flies to nine international routes from Kota Kinabalu and with the long-haul plans they would be looking beyond south East Asia.

“It makes sense now to make Kota Kinabalu the centre between north Asia and Australia.

“If we are able to bring AirAsia X here, we will be looking at Australia destinations first, Sydney possibly,” added Fernandes.