KUALA LUMPUR (Aug 30): AirAsia Group Bhd group chief executive officer Tan Sri Tony Fernandes said the budget airline is in the midst of getting a dedicated low-cost carrier terminal (LCCT) in Bayan Lepas, Penang by 2022, which will drive its cost lower.

“AirAsia already occupies 50% of the capacity at the Penang International Airport (PIA). We would like to turn Penang into a key northern transit hub connecting directly from Southeast Asia to this state,” he said in a statement to announce the airline’s financial results for the second quarter ended June 30, 2018 (2QFY18) today.

AirAsia saw its cost per available seat kilometre (CASK) including fuel, increased slightly by 4% year-on-year (y-o-y) to 13.77 sen in 2QFY18, contributed by higher maintenance and overhaul and a 29% increase in average fuel price to US$89 per barrel jet kerosene compared with US$69 per barrel a year ago.

However, CASK ex-fuel fell by 2% y-o-y to 8.05 sen in 2QFY18 from 8.21 sen in 2QFY17 as a result of its cost efficient operations and partially contributed by a 7.7% y-o-y strengthening of the ringgit against the greenback.

On Aug 6, Finance Minister Lim Guan Eng announced that the federal government was in talks with AirAsia and Malaysia Airports Holdings Bhd (MAHB) to build a LCCT next to PIA in one to two years, to cope with the increasing number of air passengers to the state.

Lim said then that the government was looking at the LCCT option as the proposed project would be fully funded by private companies, lessening the burden of the federal government which can’t afford to fund it for the time-being as it tackles the RM1 trillion debt problem.

“It would take about one to one-and-a-half years to build a LCCT, while the expansion of the main airport (PIA) would take two to two-and-a-half years,” he had added.

It was also reported that the current airport has approached its maximum capacity of 6.5 million passengers per year, handling about 7.1 million in arrivals.

Meanwhile, Fernandes said AirAsia will be rolling out its Fast Airport Clearance Experience System (F.A.C.E.S), an airport facial recognition system with self-boarding gate, at Avalon and Kuching airports to further reduce its costs. This service has already been rolled out at Senai International Airport in Johor Baru earlier this year.

“These automation efforts have enabled us to reduce staff costs while improving airport efficiencies. In the near future, all our passengers will be able to board with their faces, eliminating the hassle of showing their passports to board our flights,” he added.

AirAsia shares closed down five sen or 1.43% at RM3.44 today, with 5.73 million shares done, for a market capitalisation of RM11.5 billion.

Source: The Edge Markets