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Thread: Sime Darby gets OK for KLIA-East@Labu/KLIA2

   
   
       
  1. #1
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    Sime Darby gets OK for KLIA-East@Labu/KLIA2

    This is potentially a big problem. Within two years of the KILA LCCT opening, it is full. This indicates very poor planning. Normally, it will be cheaper to expand from the existing airport rather than putting up a new airport, especially one that is so near.

    This project stinks.


    Sime Darby gets OK for Labu LCCT plan

    KUALA LUMPUR, Jan 5 – Sime Darby Bhd has got government approval to develop the proposed private low-cost carrier terminal (LCCT) project in Labu, Negri Sembilan.

    In a statement to Bursa Malaysia today, conglomerate said that the project was an integral part of its development plan for its Negeri Sembilan Vision City (NSVC).

    NSVC is part of its Central Vision Valley (CVV) property development project spanning Selangor and Negeri Sembilan.

    Sime Darby and budget airline AirAsia Bhd had proposed to jointly develop and operate the RM1.6 billion LCCT which will be known as KLIA-East@Labu.

    The project will be privately funded.

    The RM1.6bil is an estimate of the cost of structures and the runway but did not include the 3,000-acre land where it would be constructed.

    http://www.themalaysianinsider.com/s...ec944b0513259/
    py

  2. #2
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    Re: Sime Darby gets OK for Labu LCCT plan

    I thought MAHB was tasked with running all the airports in the country as part of a privatisation exercise. Now Labu is being developed outside the ambit of the MAHB. Are we not supposed to have consistent govt policies?

    The new budget air terminal at Labu

    Letters
    by J.C.

    I read with apprehension at the recent announcements by Sime Darby Berhad and Air Asia with respect to their receiving government approval to build a new low-cost terminal at Labu, Negeri Sembilan. The announcements coincided with a statement by Malaysia Airports Berhad (MAHB) that it is ready to construct a new low-cost terminal to replace the existing LCCT at KLIA. The statements, and the subsequent comments by Air Asia spokespersons, gave the impressions that a new low-cost terminal is urgently needed, that MAHB has not been responsive to the needs of Air Asia, that Air Asia could easily save 15 pct of operating costs by moving to the new terminal at Labu and that not a single sen of public money will be utilised.

    The following questions need to be answered by the government:
    http://blog.limkitsiang.com/2009/01/...minal-at-labu/

    Another take on the issue:

    Brunsfield and ECM Libra are involved?


    http://simedarbywatch.blogspot.com/2...t-else-is.html
    py

  3. #3
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    AirAsia for Labu LCCT - Tony Fernandes' POV

    There is nothing consistent about govt policies, other than most of it does not benefit the Rakyat first.
    Most of it seems to siok sendiri plus cronys.

    Last time was helping a friend in opening an outlet in Kuching airport, it was raining INSIDE!
    And the rain is not part of the built-in feature.
    Hellooo...this is an international airport?


    CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth
    Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".
    For full interview >> http://www.nst.com.my/Current_News/NST/Monday/National/2450577/Article/index_html
    Q: But if AirAsia moves into MAHB's new LCCT at KLIA, wouldn't that make it a hub? Wouldn't it be better for the country for AirAsia to move there instead?
    A: One reason why we started AirAsia X is because the connectivity at KLIA is poor. There are not that many international connections.

    That's why we thought that if we don't do something, we are going to lose out because Tiger Airways (a Singapore competitor) has all the benefits of Changi airport.

    Malaysia only has two European connections, Lufthansa and KLM (Royal Dutch Airlines), and maybe five Gulf airlines.

    We were scared. That's why we started AirAsia X. And now we can say we have passengers from Australia who connect with us. Eighteen per cent of passengers from AirAsia's foreign connections stay in Malaysia, while the rest use us to connect elsewhere. By March 2011, we will have flights to London, Japan and the Gulf.

    In other words, AirAsia has become a hub by itself. You can put us in the new MAHB-proposed LCCT and there still wouldn't be any on-site connectivity.

    We might be at KLIA but we are still situated at the terminal opposite the main airport. No link, no connectivity, hub destroyed.

    If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.

    Where in anyone's dreams would KL the hub beat Changi? And yet it is near to realisation. The reality to all my fellow Malaysians is, that's income coming into the country.

    Q: What about accusations of wastage? That the government has spent all that money building the current LCCT and now we need to build another one, possibly two.
    A:
    There's no way AirAsia can remain at the existing facility. Something needs to be built.

    It's set that we have to build a new terminal. Whether we build it in KLIA or Labu, it has to be built, so there's no money wasted there.

    Then you say there are two runways at KLIA, we should maximise them first. But MAHB has said that eventually there is a need for a third runway, and guess what we are doing? We are building it now and it's only 7km from the existing two.

    There is no wastage. Nothing unnecessary is being built.

    The only duplication I would say is the tower. Because of the distance of the new runway from KLIA, we need our own air traffic control tower.

    We will finance the construction of the tower, not the government. Department of Civil Aviation officials will have to man it, but we will also pay their income.

    Q: There has been a lot of negative public perception of this project. People are suspicious of the way the project was approved by the cabinet. People are wondering why Sime Darby, a huge government-linked company, is coming in. The blogs are rife about you benefiting from cronyism.
    A:
    I have responded to many of the allegations on the blogs themselves. I have nothing to hide.

    We are a very negative nation. I think we live in a wonderful country though it's not perfect.

    But the bad thing is, Malaysians have this bad habit of stereotyping successful people.

    AirAsia has worked really hard for all that we have for the last seven years, without any handout.

    Let's look at this situation and the potential cronyism.

    Sime Darby is a public-listed company. Everything is open, it's all public accounts. It's transparent, everything is an open book.

    AirAsia is now negotiating aggressively with them on the terms of KLIA-East, no different from how we negotiate with MAHB or anyone.

    As for the cabinet decision, we put in the proposal six months ago. It's only now that the information has come out. It wasn't an on-a-whim decision. The government doesn't do things like that.

    Even Penang Chief Minister Lim Guan Eng is asking us not to build the new LCCT in Labu but in Penang. If we are cronies, then why is the opposition asking us to do that? It took me seven years to get the KL-Singapore route. If I was a crony, would I have to wait that long?

    We are basing the terminal in Labu for many reasons and one of them is the potential of bringing more development to Negri Sembilan and Malacca.

    The government has been talking about its economic stimulus package, but the government alone cannot be responsible for stimulating the economy.

    By building KLIA-East, we are creating jobs and pumping money into the country. Sime Darby has an amazing plan for its Central Vision Valley project.

    KLIA-East can be the first purpose-built low-cost airport in the world. We can radicalise the passenger experience. No one has done that.

  4. #4
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    Re: Sime Darby gets OK for Labu LCCT plan

    Hmmm...KLIA planning screw up?
    Hello? Hello? Bad Connections...


    Hard Questions on KLIA East @ Labu by Wee Choo Keong, Wangsa Maju's MP
    http://weechookeong.wordpress.com/20...f-the-week-42/
    1. Why the hurry to rush through the approval to build KLIA East @ Labu? Has it got anything to do with Abdullah Badawi’s term as the prime minister coming to an end in March 2009?

    2. Is the construction of KLIA East @ Labu a purported attempt to shore up and safeguard the political future of a young and ambitious politician?

    3. Why build KLIA East @ Labu when KLIA is still grossly under-utilised until today? (KLIA was originally designed to handle 125 million passengers a year but is now only handling about 25 million.)

    4. Why build KLIA East @ Labu when the government has already built LCCT in Sepang and spent a total of almost RM244 million for the seeming exclusive use of AirAsia? (The sum includes the RM123.9 million used for its extension and upgrade as recently as 2008 last year.)

    5. Why build KLIA East @ Labu when it will be a threat to public safety when its location is dangerously close to busy KLIA and LCCT in Sepang with a straight-line distance of only 10 km between them when ICAO (International Civil Aviation Organisation) strictly recommends that the minimum distance between two airports should be at least 40 km?

    6. Why build KLIA East @ Labu when it will be at a much further distance away from the Klang valley where far more passengers will hail from?

    7. Why build KLIA East @ Labu at such great cost for the exclusive use of one airline - AirAsia?

    8. After the construction of KLIA East @ Labu is completed, will LCCT in Sepang be abandoned?

    9. What is the synergy between the businesses of Sime Darby (a GLC) and AirAsia (a private company) that makes good sense for both companies to consider coming together to build KLIA East @ Labu and hope to make a success of it?

    10. Sime Darby does not own enough land in Negeri Sembilan for building KLIA East @ Labu which will require about 3,000 acres. So from whom will Sime Darby be buying land? Who are the owners of this land? Are they cronies, family members and/or people who are friendly and personally connected with Sime Darby and AirAsia?

    11. If KLIA East @ Labu is apparently a joint-venture between Sime Darby and AirAsia, does AirAsia have the fund for this massive RM1.6 billion project when the company has suffered heavy losses for hedging aero fuel price and has to take delivery of 150 Airbus planes at an average of 1 plane per month?

    12. Is it too far-fetched to consider that KLIA East @ Labu is perhaps built to help accommodate the parking need of AirAsia’s Airbus planes as they are delivered?

    13. AirAsia sells air tickets in advance as far ahead as 1 to 2 years which is equivalent to deposit-taking. What will happen to this money which belongs to the public in the event AirAsia goes under because of its heavy commitment and undertaking in the construction of KLIA East @ Labu?

    14. If AirAsia is purportedly doing well and has the fund to build KLIA East @ Labu, what are the reasons then behind all the foreign investors selling off their shares in AirAsia?

    15. What is the reason for EPF to be the biggest investor of AirAsia, a JV partner in the construction of KLIA East @ Labu with Sime Darby, and why does EPF continue to buy shares in AirAsia when its share price continues to dip south?

    16. Does Sime Darby and AirAsia have the fund to sustain the maintenance of KLIA East @ Labu when it will cost, on average, about RM40 million a year to maintain an airport?

    17. Is the reason for EPF to be a major shareholder in AirAsia, which has entered into a JV with Sime Darby to build KLIA East @ Labu at great cost, so that when this massive project needs to be bailed out EPF will be there to do so with the rakyat’s money?

    18. Even though the construction of KLIA East @ Labu is claimed to be a Privately Funded Investment venture, should the authority throw caution to the wind and compromise on public safety by giving its approval?

    Despite the seemingly beneficial economic development it brings to Negeri Sembilan at first glance, should the authority in all honesty in the name of public safety, public convenience and public interest be conscionable to give its blessing and approval for the building of KLIA East @ Labu for some - if not all - of the questions asked above?

  5. #5
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    AirAsia flying into turbulent and stormy weather?

    Silver lining among the dark clouds?

    Can you hear the drums fernandes?
    I remember long ago another starry night like this
    In the firelight fernandes
    You were humming to yourself and softly strumming your guitar
    I could hear the distant drums
    And sounds of budget airline calls were coming from afar
    Fewer people are flying, but AirAsia is deploying more planes
    By Ioannis Gatsiounis

    http://www.themalaysianinsider.com/i...ng-more-planes
    KUALA LUMPUR, Jan 13 – Late one evening recently Tony Fernandes was kicking back on his living room sofa in baggy shorts and a T-shirt in his suburban home here. He looked less like a chief executive getting pummeled by a global financial crisis than an overgrown teenager likely to have an Xbox controller in his lap.

    His company, discount carrier AirAsia, is careening, just like the rest of the industry, but he’s upbeat.

    “One has to see our record of coping with crises,” he says.

    When we last checked in with Fernandes, his airline business was soaring and he was rolling out hotel and finance outfits. Now the airline is flying into some stiff headwinds. Nearly 30 airlines worldwide went out of business in 2008. The International Air Transport Association figures the industry lost $5.2 billion and will lose another $2.5 billion in 2009. And air travel in Asia shrank 6.1% in October versus the same month the year before.

    But AirAsia is expanding as it takes delivery of new planes. “I still think there’s a huge demand for travel,” he says.

    His hunch is that as the financial crisis deepens, travellers will trade down from full-service to no-frills carriers.

    It’s a risky strategy. A study in August by market research firm Synovate found that ....more here


    It’s his back yard of Southeast Asia, though, that he plans to dominate.

    “I’m a big believer in Asean (Association of Southeast Asian Nations). If we can get an ASEAN common market (an open-skies policy allowing the region’s airlines to fly anywhere else in the region, which isn’t expected until at least 2015), who cares about India and China? Our playground is 600 million people.” – Forbes Asia

  6. #6
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    Re: AirAsia for Labu LCCT - Tony Fernandes' POV

    Quote Originally Posted by racheljansz
    CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth
    Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".
    For full interview >> http://www.nst.com.my/Current_News/NST/Monday/National/2450577/Article/index_html
    Q: But if AirAsia moves into MAHB's new LCCT at KLIA, wouldn't that make it a hub? Wouldn't it be better for the country for AirAsia to move there instead?
    A: One reason why we started AirAsia X is because the connectivity at KLIA is poor. There are not that many international connections.

    That's why we thought that if we don't do something, we are going to lose out because Tiger Airways (a Singapore competitor) has all the benefits of Changi airport.

    In other words, AirAsia has become a hub by itself. You can put us in the new MAHB-proposed LCCT and there still wouldn't be any on-site connectivity.

    We might be at KLIA but we are still situated at the terminal opposite the main airport. No link, no connectivity, hub destroyed.

    If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.

    Where in anyone's dreams would KL the hub beat Changi? And yet it is near to realisation. The reality to all my fellow Malaysians is, that's income coming into the country.

    The only duplication I would say is the tower. Because of the distance of the new runway from KLIA, we need our own air traffic control tower.

    We will finance the construction of the tower, not the government. Department of Civil Aviation officials will have to man it, but we will also pay their income.

    As for the cabinet decision, we put in the proposal six months ago. It's only now that the information has come out. It wasn't an on-a-whim decision. The government doesn't do things like that.

    We are basing the terminal in Labu for many reasons and one of them is the potential of bringing more development to Negri Sembilan and Malacca.

    The government has been talking about its economic stimulus package, but the government alone cannot be responsible for stimulating the economy.

    By building KLIA-East, we are creating jobs and pumping money into the country. Sime Darby has an amazing plan for its Central Vision Valley project.

    KLIA-East can be the first purpose-built low-cost airport in the world. We can radicalise the passenger experience. No one has done that.
    Reading the interview of Tony again, some of the things he says make sense.

    There may be some areas of concerns concerning:

    No connectivity between KLIA & LCC.

    Safety due to proximity of the two airports. This is no. 1 and cannot be compromised.

    Distrust of the govt due to previous bad experience with privatisation.

    Sudden announcement of the project even though a proposal was submitted six months ago.
    Trafic projections: 60 million passengers by 2015, whereas Airbus projects sales to drop 50-60% drop in world aircraft sales: http://www.todayonline.com/articles/298744.asp -


    py

  7. #7
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    KLIA East called off

    There are a few observations here:

    1. UMNO clearly has not learned from Mar 08 GE or the Permatang Pauh By-elections.
    2. They tried to push through the helicopter deal, the broad-band project, privatisation of IJN and now KLIA East.

    They are still practising the Boiling Frog Strategy and when the public object strongly, they will back off and look for other opportunities to rob the nation.

    This will not be the last attempt.

    The only solution is to kick them out of office like the Taiwan KMT and let them reform while in the opposition. Otherwise, there will be no end to their nonsense.


    KLIA East called off

    KUALA LUMPUR, Jan 30 — It is confirmed. The controversial KLIA East project is off, stillborn at the drawing board because it had become too costly politically for the administration.

    But it was not all bad news for Air Asia, the region’s largest budget carrier and the promoter of the idea to build the RM1.6 billion airport in Labu. The carrier managed to extract some concessions from the government, namely that Malaysia Airport Holdings Berhad (MAHB) build a new terminal by 2011 and consult Air Asia on the design and other issues pertaining to the operations of the facility.

    Several government officials told The Malaysian Insider that MAHB was told to lower charges for the budget carrier, complete the construction on time and make the new terminal an energy efficient complex.

    http://www.themalaysianinsider.com/i...ast-called-off
    py

  8. #8
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    Boeing jet orders: Minus 13 More '09 cancellations may cut production

    Quote Originally Posted by racheljansz
    CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth
    Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".
    If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.
    Tony Fernandez is projecting passenger traffic to increase to 55 milion passengers by 2013 and has pushed MAHB to complete the new LCCT terminal by 2011. What happens if there is a shortfall?

    Does Tony know something that Boeing doesn't?


    Boeing jet orders: Minus 13
    More '09 cancellations may cut production


    By JAMES WALLACE
    P-I AEROSPACE REPORTER

    With the cancellation of another 16 orders for its 787 Dreamliner, which is two years late, The Boeing Co. has started out 2009 losing more orders than it has won.

    More…
    py

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    Transport: KLIA2 not affected by inflated contractor list says MAHB

    KLIA2 not affected by inflated contractor list says MAHB


    By Lee Wei Lian
    November 30, 2011
    Artist impression of the new KLIA2 low cost terminal, courtersy of skyscrapercity.com.

    KUALA LUMPUR, Nov 30 — KLIA2’s delay and increased cost is not down to a lengthy list of 90 contractors and consultants deployed for its construction, Malaysia Airports Holdings Berhad (MAHB) said yesterday.
    The new low cost carrier terminal in Sepang is expected to be the largest in the world, with the capacity for 45 million passengers annually.

    It is one of the economic stimulus packages identified in the wake of the 2008 financial crisis and the government had then apparently insisted that the work be spread around to help as many parties as possible.

    The perceived inefficiency arising from the large number of contractors involved was speculated to be one of the reasons that the cost of KLIA2 nearly doubled from the original estimate of RM2 billion to RM3.9 billion and its opening delayed from September 2011 to April 2013.

    MAHB managing director Tan Sri Bashir Ahmad said however that the cost of KLIA2 was about RM4,600 per square meter (psqm) which was lower than many other terminals which often ranged from RM5,000 to RM10,000 psqm.

    He also said that the quality was not affected by having to engage a wider number of parties, which were selected via open tenders, as the board was careful about adhering to strict processes.

    “The key is coordination,” he said at a press conference.

    KLIA2 project manager Mohd Zaifuddin Idris said that there were 40 main contractors and 50 consultants involved and the work was divided into some 40 packages.

    He said that the number of sub-contractors involved in the main terminal building of KLIA2 was “easily 10” although the total number of sub-contractors for the project was uncertain.

    “The government wanted to make sure everyone can survive,” he said during a media tour of the KLIA2 construction site. “Otherwise many companies would have closed down and we would have less competition (in the future).” (In the US, this is known as allowing as many people to feed from the trough as possible)

    Material presented by Bashir showed that the new terminal was delayed three times from its original completion date of September 2011 because of new requirements.

    The first delay to April 2012 was due to the design competition and open tenders.

    The delay to October 2012 was due to the extra commercial space added and the extension of the third runway.

    The third delay to April 2013 was due to the recent decision to fully automate the baggage handling system.

    The breakdown of the components leading to the increase in cost were:

    - Larger terminal building : RM420 million. (150,000 sq m to 257,000 sq m)

    - More aircraft stands : RM160 million (50 semi contact stands to 68 gates and 8 remote stands)

    - Larger runway: RM180 million (2.5km long, 45m width to 3.96 km long, 60m width)

    - Increased earthworks: RM670 million (4.85 million sq m to 11.19 million sq m)

    - Aerobridges: RM120 million (80 aerobridges).

    - Upgraded air traffic control tower: RM130 million (77m height to 93m height)

    - Upgraded public infrastructure: RM260 million (8km with 1.5km elevated to 15km with 5.4 km elevated road.

    KLIA2 can handle up to 45 million passengers, three times the capacity of the current LCCT.

    It will be connected to the Express Rail Link with the potential to be connected to KTM in the future.

    It is also modular in design and will be able to add satellite terminals easily.

    Much of the airport revenue is expected to be generated from retail sales and KLIA2 will have 50,000 sq m of commercial space.

    MAHB is a public listed company controlled by state investment manager Khazanah Nasional.








    py

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    ‘World class’ KLIA2 may make KLIA irrelevant, says Maybank IB



    November 30, 2011
    KLIA2 is due to open for business in April 2013. — Picture by Jack Ooi

    KUALA LUMPUR, Nov 30 — The new low cost carrier terminal being built by Malaysia Airports Holdings Berhad (MAHB) conforms to such high specifications that it risks making the main KLIA terminal redundant, Maybank Investment Bank said today.The research house noted in a report today that now any airline can land at KLIA2, which is equipped to cater for even the world’s largest passenger plane — the A380 — and that it is not exclusive to budget airlines like AirAsia.

    “We are concerned that if KLIA2 turns out to be as good as according to plans, airlines executives may then question the premium at the KLIA main terminal,” said Maybank.
    A model of KLIA2. — Picture courtesy of MAHB

    It estimated that by moving from the main terminal to KLIA2, international passengers will only pay RM32 PSC (passenger service charges) as opposed to RM65 at the main terminal, or the equivalent of 51 per cent cost savings.“This may potentially dilute MAHB’s earnings as KLIA2’s charges are lower than the main terminal,” said the report.

    KLIA2, which was originally conceived as a terminal for low cost carriers, grew sizeably in scope including the construction of facilities that will make the terminal a back-up for the main terminal, almost doubling the cost to RM3.9 billion in the process.

    MAHB also decided to bring forward capital expenditure in an attempt to future proof the airport — the terminal features a runway capable of handling A380s and 747s and also a higher capacity of 45 million passengers per annum, or three times that of the present low cost carrier terminal and three million more passengers than what Singapore’s Changi Airport handled in 2010.

    It also made a publicly popular decision to install aerobridges, a decision which earned the ire of AirAsia which has been against the concept as it would mean longer aircraft turnaround times and additional charges, although MAHB insists the cost to passengers is negligible.

    AirAsia chief, Tan Sri Tony Fernandes, who built his empire by focusing on cost-cutting measures, said he feared that the ballooning price tag of KLIA2 would translate to higher airport taxes and fees in the future despite assurances from MAHB that it would not.

    Maybank said in its report that it agrees with MAHB that KLIA2 will have an internal rate of return of more than 10 per cent but that was premised on an additional RM2-3 billion in non-aeronautical revenue to be derived from the expanded terminal over the concession period.
    KLIA2 will surpass Dubai’s T3 in terms of offering the single largest passenger terminal capacity in the world when it opens. — Picture by Jack Ooi

    When it opens for business in April 2013 after a 17-month delay, KLIA2 will feature amenities that will rival those of most full featured airports including a huge shopping mall, premium and VIP lounges, hotels and Asia’s first airport skybridge measuring about 300 metres.A Maybank analyst noted that MAHB appeared to be “going for broke” and by catering for 45 million passengers per year instead of the planned 30 million, it will have the single largest passenger terminal capacity in the world, surpassing the previous record holder, Dubai’s T3 which has a capacity of 43 million.

    The analyst noted that while KLIA2 will earn MAHB bragging rights, the financial implications have changed.

    “As an investor, the investment thesis for MAHB has now changed to a very long-term project. Big mammoth projects take time to grow and churn significant cash flow, the initial period will be a cash flow burden,” said the analyst.

    The analyst concluded, however, that the new terminal was “very positive” for Malaysian aviation as the infrastructure will support uninterrupted growth for the next 10-15 years but the cash flow burden in the initial years will likely lower profit margins and undermine valuations'
    py

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