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This is for you, Tony

When AirAsia group CEO Tony Fernandes gave us the Quote of the Day yesterday, I was quite sure he would arouse swift response across the Causeway. Sure enough.

Budget terminals: Do points count? Asked Karamjit Kaur, Singapore Straits Times Aviation Correspondent:

So Malaysia opened its airport terminal for budget airlines last Thursday, three days earlier than Singapore. One point to Malaysia.

Kuala Lumpur International Airport's (KLIA) terminal cost RM108 million (S$47.3 million) to build, more than Changi's Budget Terminal, at S$25 million. The former is bigger, able to handle 10 million passengers a year, while Changi's can deal with 2.7 million people. Two points to Malaysia.

Then again, Changi provides free shuttle buses to ferry people between the Budget Terminal and the main airport - a five-minute bus ride.

At KLIA's terminal, unless passengers have to take a connecting flight, there is a RM2 (S$0.90) one-way charge for the 20km bus ride between the new terminal and the main airport. One point to Changi.

Changi is cheaper too with a passenger departure tax of S$13 compared to RM35 (S$15) at KLIA's terminal. Fans will add points for the free Internet access kiosks, shops and eating places.

Do all these points count in the end if the fact remains that both terminals have just one client to serve, at least for the moment?

However, Screenshots reader Chongpin has pointed out a factual error in the aviation correspondent's article, which went point-for-point for numbers.

The cost of Changi Budget Terminal is S$45m (US$27.8m) and NOT S$25m as Karamjit Kaur has postured.

There is an official Fact Sheet on Changi Budget Terminal which the Singapore broadsheet failed to audit, here in PDF.


STI Home > Free News Headlines > Story
March 30, 2006

Budget terminals: Do points count?
By Karamjit Kaur
Aviation Correspondent

IT IS tempting to go by numbers.

THE BIG PICTURE: You could say that usage levels are not the whole story. Budget terminals are part and parcel of what an aviation hub is expected to provide: a range of services to cater to the needs of different passengers. -- LAU FOOK KONG

So Malaysia opened its airport terminal for budget airlines last Thursday, three days earlier than Singapore. One point to Malaysia.

Kuala Lumpur International Airport's (KLIA) terminal cost RM108 million (S$47.3 million) to build, more than Changi's Budget Terminal, at S$25 million. The former is bigger, able to handle 10 million passengers a year, while Changi's can deal with 2.7 million people. Two points to Malaysia.

Then again, Changi provides free shuttle buses to ferry people between the Budget Terminal and the main airport - a five-minute bus ride.

At KLIA's terminal, unless passengers have to take a connecting flight, there is a RM2 (S$0.90) one-way charge for the 20km bus ride between the new terminal and the main airport. One point to Changi.

Changi is cheaper too with a passenger departure tax of S$13 compared to RM35 (S$15) at KLIA's terminal. Fans will add points for the free Internet access kiosks, shops and eating places.

Do all these points count in the end if the fact remains that both terminals have just one client to serve, at least for the moment?

Although low-cost carrier flights now make up about 10 per cent of all Changi Airport's flights, only Tiger Airways uses the Budget Terminal. Airlines which pitch themselves as low-cost carriers like Jetstar Asia and Thai AirAsia are not keen to switch to the new terminal.

This is despite the promise of lower ground-handling charges, lower office rentals and check-in counter fees and lower operating costs from the doing away of aerobridges - all of which can add up to a 50 per cent saving, the Transport Ministry said recently.

The savings do not outweigh the inconvenience to passengers, the airlines say, as not all their passengers make point-to-point flights.

Using the Budget Terminal means passengers have to get out of the building with their bags and go to either Terminal 1 or 2 to catch their full-service flights. Direct transfers in the main terminals would make more sense.

So unless the cost savings are extremely hefty, passengers would mind the inconvenience.

When the Government first touted building the terminal and Tiger Airways was known to be the only airline interested, there was some scepticism about whether there was the need to spend such big money for one airline.

To be sure, part of the reason for investing in the new facility was to keep at bay the threat from Senai airport in southern Johor. With AirAsia, which flies to Senai, offering more cut-price flights to and from more destinations, the worry was that price-sensitive travellers may choose to fly to Johor and cross over to Singapore by land, rather than fly into Changi.

Still, it is the same one-airline story for the new budget terminal in KL, with the AirAsia family - the parent airline and associates Thai AirAsia and Indonesia AirAsia - as its sole user. If success is to be measured by the number of passengers that go through these no-frills terminals, then KLIA wins hands down.

AirAsia carried five million people last year while Tiger handled under a million passengers last year.

With a bigger domestic market, there is also a greater growth potential for the Malaysian carrier which will soon also take on an additional 99 destinations from Malaysian Airlines.

Tiger Airways' growth on the other hand is limited. It has no domestic market to tap on and faces protectionist governments which require the airline to seek joint ventures to expand overseas.

This limited growth potential must be the reason the Civil Aviation Authority of Singapore decided to go with a small and modest facility which is now 40 per cent utilised.

Malaysia and Singapore are both aiming to be the region's key budget airline centre, yet neither seems able to convince more than one carrier to use its no-frills facility.

Airport operators on both sides say they are talking to several interested carriers.

Singapore Transport Minister Yeo Cheow Tong said on Saturday he is in 'no hurry' to get more airlines to switch, preferring to 'get the whole thing working properly' first. He is confident airlines will come once passengers give the new facility the thumbs-up.

Malaysia Airports is also said to be talking to budget airlines from India and Russia.

Will they succeed? Or will both terminals be kept waiting for new airlines to drop by?

Whatever the outcome, you could say that usage levels are not the whole story. Budget terminals are part and parcel of what an aviation hub is expected to provide: a range of services to cater to the needs of different passengers.

Chances are that airlines like Tiger Airways and AirAsia will stick religiously to the budget airline model, which means no allocated seats, no free food, no baggage transfers and no through check-in for passengers.

In Europe, successful budget airlines like Ryanair also operate out of basic no-frills airports like Stansted and Luton in London. For these airlines, a no-frills terminal means lower costs which translate into lower fares for passengers.

And, really, that's all that matters to travellers on a tight budget. If a family of four can save an extra $32 because of the lower passenger departure tax at the Budget Terminal, that's not bad at all.

karam@sph.com.sg

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THE BIG PICTURE

You could say that usage levels are not the whole story. Budget terminals are part and parcel of what an aviation hub is expected to provide: a range of services to cater to the needs of different passengers.

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Comments

Singapore is run by GLSs...
M'sia equally good competitive advantages are private sectors..like Airasia, Genting, YTL..not GLCs..

I still wonder, which idiot plans the LCCT 20 km away from the main airport......
And with the current airport taxes a shuttle should be 100% free.
Afterall the passengers did not ask to build it 20 km away.

Air asia has got its own airport, but managed by the same incompetent guys from MAHB. Good luck!!!

The budget airport being 20km away from KLIA is a big letdown. Imagine having to lug all your luggage from KLIA to the new terminal if you use the KLIA Express. And the added cost of an RM2 busfare plus extra waiting time for the buses. Knowing Malaysia standard of service, you now have to plan more time as the bus service will be irregular after a few months. Even the buses at KLIA does not leave on time.

As usual, Malaysia's plans are always grand in scale but lack of planning in terms of logistics and ultimately efficiency.

Take travelling to the Airport for instance. In Singapore, one can just board the MRT and get to Changi for over $2 from the city centre. In KL, the KLIA express would cost Rm35 one trip.

Also, the distance between KLIA and the budget terminal is 20km apart which is relatively far. Let's hope that the budget terminal would not be another white elephant.

wonder how much time one have to allocate if transitting from Air Asia to international flights at KLIA. In addition the task of baggage lugging from one terminal to another. Well, i suppose it was planned to use one airline if you want the convienience.

Jeff, you have a spec sheet for Singapore's LCCT. To be fair, you should juxtapose this to what Malaysia's LCCT has ;) So for the record :

Total Size of the terminal = 35,290 sq meters
Check in area = 2,650 sq meters
International Departure Hall = 3,240 sq meters
International Arrival Hall = 4,340 sq meters
Domestic Departure Hall = 4,430 sq meters
Domestic Arrival Hall = 1,900 sq meters
Public Concourse Main Area = 4,355 sq meters
Public Concourse International Arrival area = 325 sq meters
Common, Ramp and circulation = 6,760 sq meters

72 Check-in counters
(52 check-in baggage counters & 20 check-in no baggage counters)

International Departure
• 3 Sets of check-in baggage screening machine
• 12 Departure Immigration Counters
• 2 Immigration Auto Gate lanes
• 8 Boarding gates

Domestic Departure
• 3 sets of hand luggage screening machine and walk-through metal detectors.
• 12 Boarding gates
• Common Departure Lounge (Pax capacity 3,000, seats 800)

International Arrival
• 4 International arrival gates
• 12 Arrival Immigration counters
• 2 Immigration auto gates
• 2 Arrival baggage carousels
• 6 Arrival Custom counters

Domestic Arrival
• 4 Domestic arrival gates
• 3 Arrival baggage carousels

Here are some rather interesting differences between Singapore's 2.7m passenger LCCT vs Malaysia's 10m passenger LCCT :

1) Singapore : 3 arrival baggage claim belts; Malaysia : 3 Belts for domestic arrival and 2 belts for international arrivals for a grand total of 5. Question -> Is Singapore's kiasu mentality being demonstrated here or has Malaysia's planners got it wrong?

2) Singapore : 12 Arrival Immigration Auto Clearance System (IACS) counters; Malaysia : 2 Auto gates. I presume that these IACS counters are similar to Malaysia's auto gates, although I stand to be corrected. Looks like Singapore's terminal is more geared for the future.

3) In addition to these 12 IACS counters, there's also 24 arrival immigration counters for Singapore. In Malaysia, which is supposed to handle 10m passengers, there are 12 manual counters + 2 auto ones. So I presume that out of this 10m passengers, AirAsia is expecting only about 2-3m international passengers?

4) The above brings us back to baggage carousels. Remember that Singapore has 3 carousels for 2.7m. I presume that 7m domestic passengers would also be catered for by 3 carousels in Malaysia. Very differing operation specialists at work here, I'd say.

So what gives?

Two problems with the article. One I think the airport charge she's referring to (RM35) is for the main terminal at KLIA not the LCC terminal which is RM6 I believe. No 2 is the phrase "Tiger Airways' growth on the other hand is limited. It has no domestic market to tap on and faces protectionist governments which require the airline to seek joint ventures to expand overseas."
I think we can classify S'pore govt in the same protectionist category too when it comes to AirAsia...
I think the LCC terminal was a good idea but it can be improved upon. There needs to be regular free transport between the main terminal and LCC terminal including provisions for baggage transfer. I still don't understand the point of putting the terminal so far away. From the viewpoint of visitors or tourist who want to fly in to KLIA and then use AirAsia for regional flight it will be a huge hassle indeed. Not a lot of thinking went into this one....as usual...

Might as well have put the LCC in Subang Jaya.....

Air Asia and MAHB have a few bugs to weed out at the LCCT. It has been a few days but they should look at where they put the chairs as well as how people can line up in a more orderly fashion. The chairs do get in the way on the international side.

Touts were there last night at 1am!!This they have to look into.

MAHB should provide free internet kiosk or wireless as this cost is so small for them. The biggest issue I see is walking to the planes when boarding. Come rain, there is going to be some wet passengers and delays.

Mithos, no way that the LCCT could have been in Subang Jaya. Since the International Airport shifted to Sepang, look at how the areas around the Subang Terminal has developed. With the shift, developers have been given approval to built condo after condo. So from a safety point of view, how is one gonna justify having all these Boeings and Airbuses flying around the airspace of such an area?

Low cost terminal for low cost travel...But high cost cafes and drinks in an LCT is not exactly it!...After all Budget Airlines so everyone can fly. But most of this "everyone" go mamak stall most o fthe time and never go into Starbucks or cafe before so how? Discrimination is it?

LCCT is there already, good or bad still need to take it. Anyhow, i still believe tony have the power to turn around as long as G is not try to control him. Let him show you what's the difference between GLC and real business man will do.

Samarium, point taken on the issue of overdevelopment in SJ. What I meant was that the whole idea of putting the LCC into Sepang was to turn into an aviation hub for the region. Sure they use the same runway facilities but from a user perspective it might as well be two seperate entities. I'm sorry but I just dont see the reason for putting this terminal 20km away from the main one. Unless of course the idea was to hand out additional contracts for putting up transport links between the two terminals. Heard that Siemens already submitting proposal to link the ERL to LCC as well. Might as well put in a new railway system linking LCC direct to KL Sentral. Call it ERL 2 and charge RM50....Gov't ready to pay..after all they have 4.4 billion to spend now...

1. difference in number of facilities: probably referenced to the fact that the KUL LCCT is designed with a bias for domestic travel. as earlier posted by samarium, maybe the split is 30-40% international, rest domestic. also do not forget that AA operates international service out of JB and KK as well.

2. thinking out loud here: to offer lower airport tax/service charge, MAB must have tenants in the airport willing to pay a certain amount. do you think the neighbourhood mamak shop would reloctae there??? then there would be a flurry of people aghast at the possibility that the whole outfit has no class! come on lah-if you want to have everyhting cheap, then something must give. no one is forcing anyone to makan/minum there. the idea is to either get on or get off your flight and on your way smartly. if you want all the bells and whistles, then please go fly from KLIA on a full service airline. either way, when i fly AA people either buy on board or bring a snack (quietly!).

3. with domestic service rationalisation, what will the porprotion of travellers actually switching flights in KL from AA to MAS and vice versa? i would hazard a guess that not too many people would fly say KK-KL on AA and then want to connect KL-PEN on MAS say. the connections would primarily be AA-AA or MAS-MAS, which solves this.

4.MAS international-AA connections at KL: again i wonder how many people would actually do this. tourists would probably break in KL for a while then head to PEN or KK or wherever so again, i'm not too worried about the lack of KLIA main terminal-LCCT connectivity. If people want to fly say London-KK or KCH, then it is highly likeley that they would take MAS all the way and similarly if someone wants to fly Macau-Ipoh say, they would probably go AA all the way. Similarly for Sandakan-Ipoh or suchlike.i'm sure that AA will expand its local operations (point to point) much more in the months to come.

5. tall buildings and airports: essentially only the ends of the runways have to be protected from incursions by tall structures.so condos in the vicinity of subang should be a non issue.

6. singapore: yes they very much play by two or more standards. when australia doesn't let SIA fly australia to USA:wah big hoo haa! ozzies being protectionist lah whatever! AA want to operate bus to senai from singapore-cannot, must protect hub! small country talks a lot but follows even less.their definition of balance of benefits=we must win, now and always!
.on that note: nows a great chance for us to rub their nose in it from an aviation perspective!

well ERL has posted news that they are planning to build tracks from KLIA to LCCT, which is a good thing.

BUT, i'm annoyed that this proposal wasnt sent to the government when the LCCT construction begin. Why only now? This means, we'll only get smooth transition to LCCT next year.

But, once ins place, i think this would be fantastic. You could probably travel within 5 minutes or more to the LCCT from KLIA, but the cost remains an item to be debated about. How much will ERL charge and what are the terms for expansion?

I think AA & the G should take some leadership here and pump in some money. It is said the cost to lay tracks would be around RM10million, which i think the government can sponsor from their 4Billion saved from fuel!

Samarium,

I won't be surprised that Malaysia's planners got it wrong, as usual, they always like to overstate the figure…
10m passengers? Theoretically it can work but most cases, it will just screwed up.

Simple calculations:
10m for 365 days, so 27,397 for 1 day.

Immigration counters
12manuals + 2 autos = 14 counters
Therefore one counter will serve 27,397/14 = 1957
Assume that it operates 24 hours non-stop.
So, 1 hour will service 82 passengers ie. 1 passenger 44 seconds. So, you think this is realistic!!??

3 carousels for 27,397 passengers a day? Maybe they expect most passengers hand carry their luggage!!

viking, working hard on your calculator I see, but I'm afraid that you got your figures wrong. True that the LCCT is supposedly designed to handle 10m passengers but do remember that the immigration counters are only for international arrivals. I reckon the majority of those who use the LCCT would be for domestic flights. I don't know what the ratio is of domestic passengers to international arrivals. I'm merely assuming. Singapore's LCCT has 36 immigration counters for 2.7m passengers and all of this are definitely for international arrivals, whilst Malaysia has only 14 counters. So either it looks like AA is not expecting many international flights to come in and out of this LCCT or our planners are short-sighted and have not constructed the LCCT to cater for the future. Furthermore, there are only 2 auto gates. At some point in time, all Malaysians would be equipped with smart passports. So why only 2 auto gates?

Viking, you got confused between domestic and International passengers. If we say International makes up 30%, at full capacity it will be 30% of your figures across the board.

Mithos you also did the same, it is RM6 for domestic and RM35 for International.

The big difference between KLIA and Changi is some 50% of the former is domestic, and there is NO domestic traffic in Changi.

Connectivity between the 2 IS important. I believe the site was wrong, but it is too late. They never bothered to consult the user public. It is actually not that far apart, except that the shortest distance is actually airside and off bound. So to go around the East runway, it is 20Km, which is far.

The least they should provide is a free bus shuttle between the two. Like they used to between the 3 terminals at Subang. Seriously, it doesn't cost that much.

The silver lining is the direct bus service to KL Sentral. Lets just hope it runs on time, KL traffic permitting.

Viking is confused. You can't mixed domestic and international load together...

read this LCCT How to get there - Air Asia

I thought this page said it's RM 1.50 per trip and not RM 2.00. Can someone confirm the fact first? Or is this one of fthe Bolehland thingy where the published price is RM 1.50 and collect RM 2.00.....????

Low cost carrier! Thats a joke isnt it? (correct me if i am wrong)

1) Put the airport that bloody far away from the major population in KL and expect the general population to pay more for petrol and toll ect to get to a budget flight.

2)If this terminal serve only 1 million customer in the 1st year, 2 million in the 2nd year.. what about the resources allocated for the other resources for customer that is not utilised?

This is what we call "efficient utilization of resources"? The "cost" will eventually be passed onto passenger or even worse the tax payers? remember there is always the 4.4b of funds to fall back on?

Common sense in business management yah?

confuze, you memang confused la. Who says that the LCCT would only handle 1m passengers in the 1st year and 2m passengers in the 2nd year? In Q1 2006 alone, AirAsia has already handled roughly more than 1.19m passengers for their Malaysian operations. If they consistently continue to do so, this would be close to 5m passengers per annum, half the capacity of the LCCT. So I suggest that you do a little research before ranting. Failing to do so would only make you look pretty darn foolish.

Sorry guys for my ignorance. Never taken domestic flight before only internationals..

If its 30% international, it will still be a hell of waiting time since the airport don't operate 24 hours and passengers arrival are not distributed evenly for the operating hours. There could be 2 or more arrival flights over-lapping within one hour. I believe that's why Spore LCCT requires 36 counters.

I arrived at the LCCT last weekend.

KLIA terminal is just opposite the LCCT but connected by 20KM road causing the people drive one big round to reach the terminal. Building KLIA at sepang already a wrong move causing M'sia (or KL) not a favourable aviation hub, wonder how they can repeat the same mistake again.

The arrival and departure hall with zero aesthetic thought, once arrive you can straight away feel at home, no need to hv "Welcome to Malaysia" signage.

When get down the flight, the whole troop of Airasia staff will form a human barrier and "welcome you". Sorry, u can't walk towards the terminal just like that, all in all u hv to walk about 50 meters following the line drawn on the ground. Don't worry Airasia staff will point the line for you. Opps, you can't enter from the front door, hv to enter from side door.

Gaurantee more interesting for departure. Don't worry about the sign at the gate showing Miri when your boarding pass is Senai. It is correct.

Domestic flight? Pls walk yourselve another 100m, the plane is parking at International departure hall. Then the international flight passenger will cross walk themselve to domestic departure hall to board the plane. Basically, they just make you walk and walk around the plane parking bay.
Don't worry, you won't board the wrong flight. The AirAsia captain will announce:"Dear passenger, please make sure you have board the right flight, this is going to JB." Fantastic. Wonder how the terminal can pass the aviation safety standard.

The terminal operated for few days, but look like operated for few years. Budget terminal, first class price for nasi lemak. Police extra hardworking to chase drivers away. If they can equally hardworking reduce crime will be good.

Forget about competing with Singapore. Pls do the simple things right first!

Next time when u got cheap ticket, remember to count in addtional expenses and time for the truly asia terminal.

I will not use LCCT anymore. AirAsia, good luck to you in LCCT!

Where is the LCCT ?

I drove to KLIA in a rented car yesterday evening and I did not see a single road sign directing the way.

mikewang, LCCT not near KLIA, like everybody told you, it is 20KM away from KLIA. If you reach KLIA, you have probably miss it. Follow sign to sepang circuit.

if there is a bus service it will either break down or be non existent in a few months..

Buses? what buses?...go on a normal day and see the bus services. Unless the buses are owned by air asia..i don't see any future for the bus service.

Here's a perfect Malaysia Boleh solution:
Dig a tunnel under the KLIA runway, linking the main terminal and the LCCT..put in a long escalator to cross the tunnel to other side. Put plexiglass over tunnel surface so we can see plane touching down on top..contractors happy, tourists happy, minister who get kick-back happy and Tony also happy..

Thanks CountryLover. If there was a sign showing the way to LCCT after I passed the toll, then that sign must be too insignificant for me to miss it completely.

We could see the terminal when our MAS flight was taxi-ing. Didn't realise it was a "Nilai" distance away.

Agree with Mithos, some kind of infrastructure need to be there, be it tunnel, bridge, ERL or long escalator! Of course it come with cost.

Otherwise, how AirAsia takeover some domestic routes from MAS and how do we synergise them?? Flight from Terrenganu to Australia simply more difficult. The strive for KL being aviation hub and tourism destination will surely be deterred.

If possible, I also suggest to identify a better location. The current LCCT can be transformed as cargo warehouse or other purpose. Don't get me wrong, see this as opportunity and to rectify the situation.

Samarium,

Good, thanks for the facts! Good that you did the research and make sense on the 50%. What i was trying to do was to apply a simple common sense to business application.

You yourself said... 50% utilized after 5 years (thats about 60 percent growth in traffic a year!) Guess what? Looks like we have a lot of money to throw around to build big empty facility? U indeed fit nicely into GLC management team...

Anyway, FYI in simple finance terminology, we call that "investment opportunity cost".

Samarium probably holding too many AirAs*a shares :-)

confuze, perhaps you can enlighten me as to how you would go about building a terminal that caters for 6 million pax per annum and is projected to increase by 20% every year for the next 4 years using your high falutin' "investment opportunity cost"?Extend the building by 20% every year?

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