AirAsia to stay put at KKIA Terminal 2

13 Aug 2015 / 05:37 H.

KUALA LUMPUR: AirAsia Bhd is maintaining its decision to continue operations in Kota Kinabalu International Airport's (KKIA) Terminal 2, despite a directive from the government to relocate to Terminal 1.
"Kota Kinabalu tourism is right now, fragile. Moving us to Terminal 1 will create heavy congestion. We're not going to move because there's pretty heavy congestion which even MAS agrees with, there are a lot of turboprops there," its group CEO Tan Sri Tony Fernandes told reporters at the announcement of David Foster as the airline's global ambassador yesterday.
"Moving us to Terminal 1 increases the cost to passengers. There is tremendous competition in the region. If you move to Terminal 1 and increase airport tax by RM35, you will kill tourism," he added.
Fernandes was responding to a statement made by Deputy Transport Minister Datuk Abdul Aziz Kaprawi on Tuesday that all airlines including AirAsia must move to the new terminal to accommodate more passengers.
The low-cost carrier was asked by the government to move to the new terminal five times, with the latest deadline being Aug 1.
On Indonesia AirAsia, Fernandes said it is still waiting for the authorities to approve the proposal it had submitted on July 30.
On the weak ringgit, he said sales for the airline has been strong as more people would opt to fly on the budget airline during an economic downturn, to reduce cost.
Meanwhile, AirAsia X Bhd CEO Benyamin Ismail said the long-haul low-cost affiliate is seeing benefits from the weak ringgit.
"For us, we are a bit more of a beneficiary because a lot of our revenues are in foreign currencies so technically our revenues in Australian dollars is about 40%. Our ringgit is only about 25% or 30% of revenues. Ideally that's a good thing for us.
"We don't have much debt servicing. We only own seven aircraft, the others are on leases. Generally that's in US dollars," he said.
Benyamin said AirAsia X will see a profitable second half once the impact of its initiatives kick in and is confident of achieving loads above 80%.
The airline expects to announce flights to Hawaii and Auckland this year, and Delhi next year. Benyamin said it may announce one European route next year as well.
He added that it is still reviewing plans to reintroduce flights to London and is sourcing the right aircraft for the route.

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