Privatised Subang airport will affect “social agenda driven” MAHB

SELLING off Subang Airport to a private company will jeopardise Malaysia Airports Holdings Bhd (MAHB) and local aviation sector negatively in the long-run, said Parti Sosialis Malaysia (PSM).

“While they may say it will not affect Kuala Lumpur International Airport (KLIA 1) and KLIA 2, it will happen in the future as private jet travellers’ market is niche and small, even if you take the Asean market as a whole.

“Our private jet industry travellers are not as big as the US, Europe or China. Eventually, the privatised Subang airport will claw into the mass-passengers handled by KLIA and KLIA 2,” its central committee member Sharan Raj told FocusM.

Yesterday, Subang Skypark Sdn Bhd (SSSB), WCT Holdings Bhd’s wholly owned unit is proposing to enter a new concession to operate the entire Subang Airport area until 2092 – developing it to be a city airport.

Sharan Raj

Tycoon Tan Sri Desmond Lim Siew Choon is planning a takeover of the airport, but key Government-linked stakeholders are objecting the move, claiming estimated losses of up to RM11.9 bil.

SSSB is believed to have made the proposal to the Government via the Transport Ministry. The company plans to turn Subang airport to target point-to-point passengers and express freight together with related property developments.

Lim, WCT Holdings executive chairman, holds a direct stake of 7.3% and an indirect stake of 18.15% through vehicle Dominion Nexus Sdn Bhd in WCT Holdings.

“Subang airport will grow to 7.5 mppa (million passengers per annum) and will operate turboprops, small jets, helicopters, drone/air-taxis and freighters,” SSSB pointed out.

Think of rural dwellers and their needs

In his argument, Sharan said that MAHB, unlike other airport operators worldwide, was unique as it balances its profitability with social responsibility.

For starters, MAHB channels the profits from its commercial activities to support and maintain 18 short take off & landing ports (STOLPORTS).

STOLPORTS are part of the Rural Air Services (RAS), which was one of the items included during the negotiations to form Malaysia in 1963.

“MAHB uses its profits to maintain airways to small islands and rural areas in East Malaysia to send essential goods, medicine and even newspapers as these places are inaccessible by roads and river.

“So, if the privatised Subang airport eats up MAHB’s profits, STOLPORTS will be affected, leaving people living in those rural area in a lurch,” he opined.

Another problem that will happen the long run was that as fewer passengers use KLIA 1 and KLIA 2, MAHB will be forced to hike up airport charges to sustain itself.

“And airliners will just pass the additional cost to passengers. Those who are budget-conscious like those travelling frequently between West and East Malaysia will reduce their travels, affecting MAHB’s revenue as well,” Sharan stressed.

On that note, Sharan said that MAHB so far has been managed well, without even having to request for Government assistance during COVID-19, where air travel has been paralysed.

“While WCT Holding is a big company, it doesn’t have the financial capacity to acquire Subang airport on its own.

“Therefore, it would have to approach the bond market or banks for help. With that, it will have to settle its debt and private jet travellers is too small of a market for it to generate enough profits, which means it will claw into KLIA 1 and KLIA 2 passengers.

“The Government is the custodian of public wealth, including strategic national infrastructures such as electricity, water, roads, seaport, airports, and railways which should never be privatised,” he remarked. – May 7, 2021.

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