State capital set to be more important AirAsia hub
‘Some level of expansion needs to happen but what we’re saying here is, allow us to go to KKIA 2. What it would do, naturally, is it will free up capacity at KKIA so the rest of the operators can come in and utilise the airport.’ — Riad Asmat, AirAsia Malaysia CEO
KOTA KINABALU is set to take on a much greater importance in the AirAsia network with the proposed reopening of Kota Kinabalu International Airport Terminal 2 (KKIA 2), as part of the airline’s expansion plans which include long-haul flights.
In joining the likes of Kuching, Penang and Johor, the expansion in KK is part and parcel of the airline’s masterplan as well as the group’s, in moving forward and opening up opportunities for other destinations.
AirAsia Malaysia chief executive officer Riad Asmat said the expansion was a natural choice given Sabah’s strategic location with KK as its capital city.
“The hubs that we currently have, they all serve a purpose in terms of reach. The whole idea for AirAsia is networking – how quickly we can get someone in, how close we can get them to their destinations and more importantly, flying to destinations and secondary cities that are not catered by other operators.
“Sabah has the potential to give us reach down south into Australia and, more importantly, up north into northern China, Japan and South Korea.
“Sabah becomes, in a way, another option for passengers instead of having to fly to Kuala Lumpur.
“It’s not taking anything away from KL, but we want to be able to give that extra option, maybe for Australians to come through KK, stay here for a few days and enjoy the place, and then fly off to their next destination.
“This is also in line with what we are trying to encourage, which is for passengers to spend some time in a State or city during their layover.
“It just makes sense for our KK hub to connect passengers from the south up north instead of having to fly via Kuala Lumpur, Bangkok or Singapore. Sabah becomes a natural attraction,” he said.
Given the rising tourist arrivals to Sabah, Riad said reopening KKIA 2 could also pave the way for more flights catered by longhaul budget airline, AirAsia X.
The airline is aggressive in its decision to reopen the terminal not only for the inherent advantages that come with the move, but also due to practical reasons, specifically infrastructure-wise.
Put simply, Riad said AirAsia needs space to grow and believes other airlines could benefit from the move, as well as the airport as a whole.
“As it is, we are flying in eight aircraft and if everything goes well, we are looking at 10 aircraft in total by January 2019.
“KKIA currently has 17 bays and assuming things go as planned, AirAsia itself will have 10 aircraft which would easily occupy most of them.
“From a very practical view, someone needs to do something. AirAsia wants to grow and increase its network capabilities and we need infrastructure to do that.
“Without infrastructure, it will be constraining us to a certain degree but what everyone misses is the fact that it also constraints the growth of the industry.
“We are very encouraged with the number of passengers we’ve brought in since day one, to the market in Sabah, and we believe we can bring more.
“It’s all about synergy, working together and trying to figure out how we can increase passengers for the Sabah market, together.
“The potential is great. We are very confident that the numbers we are looking at, in the next five to 10 years, will grow. We need infrastructure to support that,” he explained.
Needless to say, increased tourist arrivals will greatly benefit Sabah, more so as a State that capitalises on the tourism industry.
Arrival of passengers translates directly to tourism dollars, said Riad, but it could also present opportunities for business and investment.
“Right now, we’re looking at three new destinations by the end of the year from KK itself, with the additional planes and that will bring in, easily, a 10 to 20 percent increment just in the short months that are left in this year, in terms of passengers into Sabah.
“Looking at a five-year plan or a very aggressive point of view of 10 years from now, we should be looking at nine to 18 million passengers with the number of aircraft we are going to commit to this hub.
“Sabah will surely benefit from that. One passenger will have a multiplying effect of 12 times to the State income, creating more business opportunities such as more restaurants, hotels and transportation, to name a few.
“The bottom line is, more tourists will come in. But it’s not just tourists; there’s also business and investment potential, as well as cargo movements,” he said.
According to Riad, discussions on reopening the terminal have been positive and hopefully points to a favourable outcome.
AirAsia is aware of the State government’s plan to open a new airport, and Riad explained that reopening KKIA 2 would be a short-term solution while the new terminal is underway.
He also emphasised the need for a low-cost carrier (LCC) model to be included in the new airport, especially to address capacity issues.
“If the government doesn’t approve reopening KKIA 2, we will remain at KKIA but we ask to please include an LCC model for the new airport.
“The capacity at KKIA is a challenge as it is and will not accommodate the growth plans that we have.
“KKIA 2 or an LCC model is important to us because it also brings down the cost from an operator’s point of view, but we do that to pass the cost back on to the customers.
“Some level of expansion needs to happen but what we’re saying here is, allow us to go to KKIA 2. What it would do, naturally, is it will free up capacity at KKIA so the rest of the operators can come in and utilise the airport.
“Filling up the capacity at KKIA won’t be an issue even if we move to KKIA 2, because as it is today, we have to ‘fight’ for bays, depending on who arrives early,” said Riad.
AirAsia is currently servicing eight international and eight domestic flights from KK daily, with multiplying factors coming into play in the near future.
By the end of the year, three more international destinations from KK will be added on top of existing 295 weekly flights.
It will not end there, said Riad, as the airline is also in talks to add on domestic routes, which are currently being serviced by MASWings.
“At the end of the day, our job is to utilise the equipment we have as best we can. That means we either schedule more flights to current routes or we find new destinations.
“KK has a very attractive position in terms of products available here. International passengers can be easily convinced to come to KK.
“As for domestic routes, we are currently in discussion with the Malaysian Aviation Commission (MAVCOM), to add routes to Sibu and Bintulu in addition to our existing routes to Sandakan, Tawau, Miri and Kuching,” he said, adding that it should not create a conflict of interest with other airlines servicing domestic routes.
“The real competition for us is ourselves – we have to beat who we were from day one we’ve started this business and not be complacent about things, focus on what’s in front of us and just service the passengers.
“Competition can be anybody. We welcome competition because it keeps us on our toes but genuinely, I’m just excited for the possibility that we will be able to do the routes after years of asking for it,” Riad added.