Air Asia Decides to Build Its Own Airport in Kuala Lumpur

Let’s say you’re running Air Asia, the premier low-cost carrier in Southeast Asia, and you’ve got a problem. You want to keep growing, but that airport at your primary hub in Kuala Lumpur can’t keep up. What do you do? Apparently, you build your own airport.

Air Asia says that it has already outgrown the low cost carrier terminal that was built at Kuala Lumpur International Airport (KLIA) in 2006, and it needs more room. KLIA has plans to make more room there, but Air Asia says that costs are too high there and it wouldn’t happen fast enough anyway. Instead, they’re going to build “KLIA East” which will be, uh, east of the existing KLIA in Labu which is apparently where there’s an enormous development project underway called Negeri Sembilan Vision City. Take a look at it on the map and you’ll see that for customers in Kuala Lumpur, it’s not much different than going to KLIA except that unlike the existing KLIA, it will be on a train line. Oh, and operating costs are expected to be 30% less.

I see something like that and I have to wonder if an airline in the US could do this. Technically? Maybe. Practically? No chance in hell. If a US airline wanted to take a stab at it, it would have to be completely privately funded with no federal money being used for operations. A US airline would also have to find a place where there’s a big population base and land is affordable. Bzzt. Try again. Even then I’m not sure if this would be allowed under anti-trust rules.

Back in the day, Boeing, United Air Lines, and Burbank Airport were all part of the same company. The government broke that one up, but I’m not sure whether that would still happen today. Anyone know the rules on this? Could an airline actually build their own airport in the US is they so choose?

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23 Comments on "Air Asia Decides to Build Its Own Airport in Kuala Lumpur"

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David
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There is the separate question as to whether an airline really should be building its own airport. It’s easy to say ‘We can do a better job at running an airport’, but I’m not sure that the embedded knowledge in the staff of an airline is enough to build and run a new airport. Yes, they can do a joint venture with a construction company, and a property/facilities management company… but it will likely end up taking up a LOT of attention and resources from the people who are meant to be running and growing an airline instead of playing… Read more »
Alexander Basek
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How is Air Asia even doing well enough to buy into a new airport with all these free-ticket sales they have? Also, I thought KUL had the KLIA Express for getting into the city on the train, unless you were referring to the other airport being on a plain jane line.

Nick Barnard
Member

Airborne Express then DHL own the Wilmington, Ohio (ILN) and call it Airborne Airpark. It wasn’t a new build (they bought the Clinton County Air Force Base.) but it served them well for quite some time.

Mind you they didn’t have all the issues of passenger airlines actually getting passengers to the airport…

A related thread is airline owned terminals, which we have a pretty good track record of in the US and worldwide.

The Traveling Optimist
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The Traveling Optimist
Theoretically, yes they could. The closest example to this is Alliance Field in Ft. Worth, purpose built for American’s new maintenance base. Alliance never became the hive of activity everyone hoped for but it’s the only one I can think of where an airport was built from scratch essentially for just one tenant. Remember the “wayport” idea of the 80s? A huge facility in the middle of nowhere purpose built for connections with no constraints on 24 hour operations or noise. Nice idea but it died quickly because there was no local traffic to draw from or even a local… Read more »
David M
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Kapalua West Maui Airport (JHM/PHJH) was originally built by Hawaiian Airlines. In fact, the IATA code JHM for the airport comes from John H. Magoon, the president of the airline at the time the airport was built.

Aaron
Guest
Yeah, I was going to mention the Airborne Express/DHL one. That one is probably the best example I can think of of ‘non public’ ownership that is not military or private. In the US I just don’t see where in the world you could put one except out in the middle of nowhere, which as they say, creates its own problems. Like anywhere around DC, SF, LA, Chicago, Dallas, NY, Miami, etc, there’s just no way. Well, actually Miami I take back, if they want to build into the everglades. Or Chicago, if they want to build one in Lake… Read more »
A
Guest
I didn’t look at the map too closely but how far apart are these two airports? I would think if an airport had fast and efficient commuter rail to a central business district in a major city an airport could effectively be over 50 miles from the city. All would depend on how much of a discount the airlines operating there would be offering over the closer in airport. Also, how easily could people get to this airport. Another thing to consider is that since so many offices today are in the suburbs sometimes a central airport location isn’t ideal.… Read more »
Jason Steele
Guest

That “really big airport in the middle of nowhere” that does not have to worry about 24 hour operations was actually built. It is called “Denver International Airport”, and it is nowhere near Denver. Perhaps if it was never built, someone could have built a private commercial airport outside of town where the land is cheap.

Perhaps some place in Florida could someday host it’s own private airport, or convert an existing field to private use.

Million Miler
Guest
As The Traveling Optimist points out, Alliance in Fort Worth is a very good example of a private airport. It was built by Hillwood Developers, the investment vehicle of the Perot family. Two minor clarifications, while American is indeed a large tenant, it was not purpose built for them. The original concept was a multi-modality terminal. It is bounded on one side by the major North-South interstate running from Mexico to Canada and on the other side by a major rail terminal. The vision was to bring international cargo in by air and provide quick transfer to domestic points via… Read more »
Oliver
Guest

Bangkok Airways owns and operates the airport of Koh Samui in Thailand:

http://www.samuiairportonline.com/

james
Guest

quote

Technically it’s inside the city limits. Somewhat askew limits to accommodate it anyway.

While 10 years ago it was considered “out in the boonies” it’s now easily accessible by freeways from the north and south. in addition to the airport access freeway. Many business and residential developments have grown to the southwest and northwest of the airport.

I have a friend who lives along Pena and works downtown, and doesn’t consider it a long commute at all (by larger city comparisons.)

Coastalaviator
Guest
One example that hasn’t been mentioned…at least that I saw…is the Branson airport being built in MO and is scheduled to open in May…I think. This airfield is completely private, although from what I’ve read, it had much help from the local county government. I guess time will tell if “they build it, they will come.” I think the Air Asia initiative is an interesting one…and having visited KL, if there is a direct high speed train involved from the City Center to KLIA East, they would be a step ahead of the current KLIA. The current train is not… Read more »
The Traveling Optimist
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The Traveling Optimist
Million Miler – Thanks for the added background on Alliance. I still remember the debates over building it in the first place and not simply re-designing Meacham to perform the same work. A – I love trains! The TGV and ICE networks are both fantastic. Only problem in the US are the lobby groups that have successfully killed every attempt at such a network anywhere other than the WAS-NYC-BOS corridor. Further, most major European airports are linked in to the national rail network. Not in the US. What an incredible way to get out of this economic slump! Put people… Read more »
Gennaro
Guest

That’s an interesting development. I’m most interested to see how they deal with air traffic. Does the private, Air Asia, airport get equal treatment with the already existing KL airport? How does that influence flight quality?

asad
Guest

I remember KL airport being in the middle of nowhere, tons of empty space around but there was a train from there to the city. It was a big modern airport and I am surprised that they are running out of space, it’s not like KL Is HK.

rerjohnson
Member
Looking closely at the KLIA terminals – the Main Terminal on the North side of the airport, and the X-shaped Satellite building reached by tram from the main terminal, it does not seem to be very busy – I counted 4 wide-bodies and 3 737-size aircraft at the gates. There are two 737s parked at the Low-Cost terminal. Today’s operations between 7am and 8am on the airport’s schedules at http://flight.klia.com.my include 20 Air-Asia departures and two arrivals: during the same period a total of 10 departures and 23 arrivals are listed for all carriers, including code-shares listed more than once,… Read more »
QRC
Guest
Cranky, what would you say if Ford decided to buy the Golden Gate Bridge? Or better yet…build another Golden Gate Bridge next to the old one, just for Ford cars to use? That’s about how ridiculous I think this is. I think maybe to those in the airline industry too long the airport thing sounds like a good idea ;) . To those of us who would be asked to finance or invest in the thing, I think we’re all laughing with our pockets closed. I do not want Tony Fernandes running an airport. Period. The list of positives is… Read more »
The Traveling Optimist
Guest
The Traveling Optimist
“Could you launch an ICBM sideways?” “Yes, but why would you want to?” Could an airline build it’s own airport? Same answer. Beyond the regulatory, environmental and capital issues there’s the simple matter of practicality: no interline capabilities. Imagine AA, if they had the money and talent to do it, deciding to build its own airport in Chicago, one without slot controls. For the sake of the oneworld alliance they’d automatically have to get those airlines to buy in to the project as well, route those customers where possible over other shared gateways or lose that traffic all together. Then… Read more »
Malaysian
Guest

Guys… what a lively discussion here… however… in Malaysia… this Air Asia airport is a totally different issue…. somewhat political. Embarassing but true.

Read it here:

http://www.thekualalumpurtraveler.com/lcct-labu-ada-udang-di-sebalik-mee/

David
Guest

The Malaysian Govt has declined to give permission to Air Asia for its own airport

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