KUALA LUMPUR: Malaysia Airports’ major shareholder Khazanah Nasional hopes everyone will see real improvements of Malaysia’s airports within the next 12 months.
It is also aiming at increasing efficiency to lower the costs of transformation by spending less than RM10 billion in capital expenditure as proposed by the government, says Datuk Amirul Feisal Wan Zahir, managing director of Khazanah Nasional Bhd.
“I don’t want to put too much pressure on them (Malaysia Airports), but we have made requests, particularly regarding congestion issues that people observe.
“The management needs to take action so that airport visitors will have a better experience by 2026,” he said.
In an exclusive interview with Sin Chew Daily, Amirul Feisal explained the purpose of full acquisition of Malaysia Airports as the airports in Malaysia have been lagging behind their regional counterparts over the years and need more investment for improvements.
Privatisation allows for greater autonomy to enhance the long-term performance of the airports.
“According to our research, from 2010 to 2019, local airport passenger traffic only grew by an average of 1 per cent.
“In a survey, about 80 per cent of passengers indicated that they would not return because Kuala Lumpur International Airport (KLIA) has nothing appealing to offer.
“In contrast, airports in Indonesia, Thailand and Singapore are experiencing a surge of passengers with double-digit growth,” he said.
In terms of capital expenditures, Amirul Feisal pointed out that Malaysia Airports had spent very little, with only RM1.3 billion invested over the past five years while Indonesia and Thailand allocated RM8.1 billion and RM6.8 billion, respectively.
“While KLIA is quite competitive for short-haul flights, it is under-developed for long-haul routes, an area that can be improved.
“However, investment in airport facilities has been severely lacking, including the well-known issue with the airport shuttle system.
“Considering these factors, we decided to take action,” he said.
Khazanah Nasional has brought in US-based Global Infrastructure Partners (GIP) as a shareholder and Malaysia Airports was delisted.
Large expenditure will inevitably affect dividends for both major and minor shareholders. The cash flow may be affected too.
“This is why we opted for privatisation. Now, we can truly begin work.”
Khazanah Nasional partnered with the Employees Provident Fund (EPF), along with new investors GIP and the Abu Dhabi Investment Authority (ADIA), to form the GDA consortium in May last year.
The consortium acquired Malaysia Airports at RM11 per share, with the total transaction exceeding RM12 billion in February.
Khazanah Nasional holds a 40 per cent stake, EPF 30 per cent, while GIP and ADIA collectively own the remaining 30 per cent.
GIP, as a new shareholder, has extensive experience in airport investment and management.
A spokesperson cited Sydney Airport as an example, where GIP managed to improve security screening times by 60 per cent within 18 months.
Customer experience the primary focus
Amirul Feisal reiterated that customer experience is the top priority for Malaysia Airports.
“It’s not just about fixing the airport shuttle and ensuring the baggage system operates smoothly; we must also reduce waiting time.
“People should spend less time in queues and administrative processes and have more time to enjoy the airport environment,” he said.
Another key goal is to strengthen long-haul routes.
Amirul Feisal noted that long-haul destinations from Malaysia airports have significantly declined from 33 in 2010 to just 21 in 2023.
“The challenge is to restore past prosperity by attracting foreign airlines while ensuring that major domestic carriers such as Malaysia Airlines and AirAsia are not negatively impacted,” he said.
Expanding flight destinations requires increasing airport capacity, which is why expansion plans for Penang and Kota Kinabalu airports are underway.
“Again, the focus is on ensuring that projects are completed on time, within budget, and designed for future needs.”
According to Amirul Feisal, Malaysia Airports will see three major improvements:
Enhancing customer experience by optimising airport operations and reducing waiting time, expanding long-haul routes while supporting local airlines and continuing airport expansion projects.
How much will airport overhaul cost?
Amirul Feisal admitted that Khazanah Nasional is still considering the final capital expenditure amount.
“Although the government has suggested investing RM10 billion in Malaysia Airports over five years, as a shareholder, Khazanah Nasional hopes to transform the airports through technology and efficiency improvements without necessarily spending a massive amount.”
He explained that besides workforce reallocation, traffic efficiency can be enhanced to minimise costs while improving passenger experience.
“Regardless, the investment will likely reach several billion ringgit, especially with the expansion of Penang and Kota Kinabalu airports.
“The final figure is still uncertain – it could be RM10 billion, or it might be RM5 billion.”
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