Malaysia's $2.3 billion Kuala Lumpur International Airport (KLIA) has opened for business but a host of technical problems spoilt the party.
KLIA opened on 30 June but computer hiccups at check-in caused three-hour waits for many passengers, while other aircraft fully laden with travellers waited hours on the tarmac until luggage was loaded.
Industry sources claim the blunders were caused by the rush to open the airport before Hong Kong's new Chek Lap Kok airport. One airline source says, 'In trying to save face, the airport has ended up losing face.'
Malaysia's Prime Minister Mahathir Mohamad insists however that the airport is 'good for the ego' as the country struggles through the regional crisis.
Analyst Michael Greenall of Caspian Securities says the timing of the airport is right and KLIA could benefit from increased tourist numbers.
Despite the teething troubles, most in the industry agree that the new airport will be a success in the long run. But it provides a headache for Malaysia Airlines (MAS). According to one source, the Malaysian government is piling pressure on the airline to divide its services between the new and old airports. A MAS source claims the airline is keen to keep its options open.
MAS faces more uncertainty after recent poor results. Pre-tax losses totalled M$225.4 million (US$54 million) for 1997 compared to the previous year's profit of M$349.6 million. MAS' share price dipped to M$1.36 compared to M$8.18 earlier in the year.
According to analyst Peter Negline of Salomon Smith Barney, reluctant local investors are awaiting details of MAS' restructuring plan.
Source: Airline Business