MAHB still eyeing partner for ISGIA

> Malaysia Airports expects fully owned Istanbul unit to be back in the black this year

PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB), which is expecting overall passenger traffic volume growth to recede to 6.3% in 2018 from 8.5% in 2017, is still on the lookout for a partner for its 100%owned Istanbul Sabiha Gokcen International Airport (ISGIA).

Passenger traffic volume for international routes is expected to grow by 8.3%, which is slower than the 8.5% registered last year, while domestic routes growth could moderate to 4.3% from 6.5%.

Last year, total passenger traffic volume stood at 96.5 million. MAHB’s airports in Malaysia are expected to see a passenger volume of 103 million this year, while Turkey is expected to see 33 million.

MAHB managing director Datuk Badlisham Ghazali told reporters at a media briefing on Friday that international traffic is expected to grow more than domestic traffic due to expansion of flight routes and carriers receiving new aircraft.

Meanwhile, growth momentum for domestic routes will ease due to the introduction of more direct international flights from Penang, Langkawi and Kota Kinabalu.

Badlisham confirmed that the airports operator is still on the lookout for a partner for ISGIA and that MAHB will maintain its majority shareholding in the event of a stake sale.

MAHB’s Turkish operations recorded a pre-tax loss of RM47.3 million in the third quarter ended Sept 30, 2017 and are expected to return to the black this year, on the back of improved infrastructure, and shorter distance of ISGIA from the capital compared with the new airport in Istanbul.

The group is planning to separate its international operations, which are currently housed under the group, to a new arm named Malaysia Airports International Sdn Bhd.

With fewer than 10 of the 39 airports profitable, Badlisham said managing profitable and unprofitable airports has been part of the conditions of the concession agreement since day one, which its shareholders acknowledge.

“We manage on a portfolio perspective. In terms of revenue, obviously, the government recognises that. The government is also encouraging MAHB to generate income from non-aeronautical revenue streams such as retail, palm oil … we develop the land for other economic activities like Aeropolis that generates income and obviously, that’s why international is also another pillar of income other than non-aero revenue in Malaysia,” he said.

This additional income stream, he said, has assisted the government in making sure that there is no constant pressure on raising passenger service charge (PSC) or airport taxes.

MAHB has plans to upgrade the capacity of more than 10 airports this year. Among those slated to undergo upgrades are KL International Airport, Penang International Airport, Langkawi International Airport, Subang Airport and Kota Baru Airport.

A total of RM52.6 million has been budgeted to upgrade six airports. This however, does not include the budget allotted for upgrade works at KLIA.

While declining to disclose the group’s capital expenditure budget for 2017, Badlisham said the allocation is expected to see a yearly increase of 30% over the next three years.