AirAsia continues push for separate LCC airports

AirAsia continues push for separate LCC airports

AirAsia's long-established advocacy for Thailand having airports and terminals dedicated to low-cost carriers (LCCs) is coming to fruition.

"I think we are getting to the stage where there will be LCC airports and terminals in Thailand," said Tony Fernandes, group chief executive of Asia's largest no-frills airline group.

He declined to elaborate on the latest outcome from discussions with Thai authorities, saying only the airline's proposition about dedicated terminals and airports floated two years ago has made good progress.

"We are really encouraged by the Thai government's understanding of the LCC concept, the differences between LCCs and full-service carriers, and the different standards they need for airports," said Mr Fernandes.

AirAsia has been keen to see Thailand and Asean set up airports and terminals especially to serve burgeoning budget air travel traffic and as a means to drive costs among LCCs and passengers downs.

The airline group has said it is prepared to invest or become a joint-venture partner, or play another role in such airport development.

The LCC airports and terminals Mr Fernandes referred to are those facilities with only minimal essential provisions, minus luxurious and comfortable features seen in modern airports like Singapore's Changi airport.

They are akin to the Low Cost Carrier Terminal (LCCT) in Sepang, Malaysia, which was in operation between March 2006 and May 2014, catering exclusively to budget airlines.

The LCCT was described by many travellers as a "warehouse" mainly because of the way it was built and limited amenities.

The LCCT helped spur the growth of AirAsia to a dominant regional player in no-frills air travel over the past 16 years.

The terminal did not provide aerobridges, nor transfer facilities, rail connections, and other facilities provided in a full-fledged terminal.

The functions of LCCT were moved in May 2014 to KLIA2, a new terminal built for low-cost air travel located two kilometres away from Kuala Lumpur International Airport's main terminal, which serves legacy airlines.

Malaysia Airports Holdings Bhd reported KLIA2 last year handled 27.1 million passengers, compared with 25.5 million at the main terminal of KLIA. The bulk of passenger throughput at KLIA2 is carried by AirAsia group airlines.

Mr Fernandes criticised Malaysia for "losing its way a little bit" with the LCC airport concept it pioneered in Asean with the opening of KLIA2, which offers greater amenities almost akin to full-fledged airports.

Aside from Thailand, he said the Philippines is the other Asean state to have adopted the LCC airport concept.

"Both countries are beginning to see the benefits of separate LCC airports in terms of raising budget air traffic and their contribution to tourism," said Mr Fernandes.

Small and medium-sized enterprises benefit from low-fare travel, with lower fares driven down by lower operating costs through LCC airports, he said.

Airports of Thailand Plc, which operates big airports like Suvarnabhumi and Don Mueang, reported LCCs increased their passenger numbers in the first half of the year by 13.7% to 30.5 million. LCCs accounted for 46.2% of all passengers at the country's six main airports in the first half this year, up from 43.9% year-on-year.

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