Malaysia is to build a dedicated terminal for low-cost airlines at its flagship Kuala Lumpur International Airport (KLIA), rejecting calls from AirAsia for the facility to be built at the old Subang airport closer to the city centre.

The transport ministry said it would cost between 100-110 million ringgit ($25-30 million) and would open early in 2006. It is aimed in part at challenging Singapore's Changi airport, where a similar low-cost facility is due to open early in 2006.

The decision to build the terminal at KLIA – about 60km (37 miles) from the city centre – rather than the closer Subang airport, was a disappointment to fast-growing AirAsia. The carrier was forced to move its operations from Subang to KLIA in 2002 but had been lobbying for the right to return to Subang, saying it would be more attractive to travellers.

The government said it chose KLIA partly because it was already earmarked for expansion and Subang would become a regional maintenance, repair and overhaul hub.

Initially the terminal will handle more than 3 million passengers a year, says Aris Othman, chairman of national operator Malaysia Airports Holdings, and will have a design capacity of 10 million passengers. There will be limited amenities and it will not be connected to the main passenger terminal or satellite terminal. AirAsia will be the main user, but it will also cater for other low-cost airlines that want to use it.

Othman says the planned terminal will help ease the burden on KLIA's existing passenger terminals.

Source: Airline Business