Expansion Room

Your master plan for KLIA Aeropolis to incorporate the space around KLIA into an airport city was launched this year. Could you tell us more about what is envisioned here?

The government of Malaysia moved the Kuala Lumpur International Airport (KLIA) 60km away from the city center, and provided us with a total land bank of 100sqkm. Since 1998, we have built two terminals and three runways, utilizing approximately 35% of the available space. What is left is a huge track of land, which can be developed in support of the airport and the surrounding ecosystem. Our largest project was the construction of the low-cost carrier terminal, KLIA2, in 2014. Half of the remaining 14,500 acres of land is reserved for future airport expansion, and the other half is subject to our new master plan. Primarily, we envision this plan to be in support of the airport ecosystem including cargo, logistics, and aerospace industries and, secondly, to improve the airport as a leisure destination for travellers. Our current capacity with two terminals and three runways together is around 70 million passengers, and we are averaging 50 million per year now; hence, there is still sufficient room for growth.

Does cargo demand factor into your expansion decision-making process?

Cargo and logistics are just as important in the aviation industry, and today we move around 750,000 tons of cargo, which can double in the next 20 years. Anticipating the growth of the e-commerce industry and intra-ASEAN trade due to the AEC, one of our three pillars is focused on building a cargo and logistics hub. With all order books combined, there are 25,000 planes ordered over the next 10 years, and 40% of those will be delivered within Asia Pacific. More importantly, airfreight manufacturers are looking to bring their activities closer to where the customers are. In OEM, engineering services, and MRO, size does matter, and having facilities close to an airport makes sense. Many airports in Asia have expanded their passenger terminals, but not many have these large tracks to support non-passenger activities. Malaysia has been enticing aeronautical companies for the last 10 years. The industry has grown from 13 to 200 companies, including multinationals such as Airbus, Boeing, and Rolls Royce. These industry giants seek space, a supporting ecosystem, and the right partners, which is what we offer. Additionally, there is a growing trend in Asia of airports becoming destinations for entertainment and leisure. In response to that, we have also allocated a large tract of land for theme parks within our development plan. Airports have developed to become ecosystems of their own, instead of just serving as transport hubs. European airports, like Frankfurt and Amsterdam, are considered magnet destinations in their own right. We look to emulate this here and are keen to explore similar partnerships to develop the leisure side of the airport.

How are you looking to expand your international activities?

We have been working on joint ventures on other airports outside of Malaysia for the last 12 to 15 years, and we used to manage airports in Cambodia and Kazakhstan. Our largest international enterprise is Sabiha Gökçen, an airport on the Asian side of Istanbul, where we have been since 2008. Together with our partners, we just delivered a brand-new terminal, which currently processes around 29 million passengers per year. It was voted the fastest growing-airport in Europe for six consecutive years. In addition to acquiring assets, we also have service contracts, like the Hamad International Airport in Doha Qatar, where we have a large facilities management contract. MAHB has managed 39 airports, ranging in size from 45,000 to 50 million passengers annually, over the last 25 years, which gives us not only relevant expertise, but the breadth of learning required to execute such projects.