KLIA and KLIA2 to be rebranded as KLIA Terminal 1 and 2

SHAH ALAM - Kuala Lumpur International Airport (KLIA) and Kuala Lumpur International Airport 2 (KLIA2) will be rebranded as KLIA Terminal 1 and KLIA Terminal 2 respectively, Transport Minister Anthony Loke Siew Fook announced today.

Loke said the cabinet has agreed to the rebranding as it would add value to marketing services at the airport, also allowing it to compete with other international airports.

"This implementation is expected to help increase the global competitiveness of the country's air transport services as well as revive the aviation sector for the benefit and well-being of the people based on the Madani Malaysia concept," he said at a press conference.

Loke also said the cabinet in principle agreed to the new material terms of the Operating Agreement (OA) to operate, manage, maintain and develop 39 airports and STOLports until 2069.

"With Cabinet's agreement reached on Feb 2, the previous contract has been cancelled while the new OA and the related Lease Agreement will be signed and finalised by end of March.

"This is a continuation of the old agreement, the difference is that it gives MAHB the flexibility in developing a more competitive and effective airport," he said.

Loke said the government and MAHB would have flexibility in funding airport development costs by using either allocation from the government via the Development Expenditure or MAHB through its suitable investment recovery model mechanism.

"The method, however, is subject to the mutual agreement of both parties, with the weighted average cost of capital to be determined only when a project is implemented and subject to government approval," said Loke.

Loke said without using public funds, an airport development trust account would be set up to receive contributions from airlines, airport users and public.

"A total of 50 per cent of the Passenger Service Charge component that is taken into account in the calculation of the User Fee will be channelled to the trust account," he said.

However, he said the government has the authority to resructure the airport industry through clustering, carving out, divestment of aiports, closure of existing airports or terminals or the restructing of the ownership of any of the facilities subject to mutual consent.

Loke also said the new material terms of OA will also enable the implementation of a more competitive commercial development plan which have the potential to increase the government's income through revenue sharing from government-owned land that is developed by MAHB.

He said MAHB can plan better long-term development for all airports under its supervision, taking into account the company's expertise and experience in the relevant field both domestically and abroad.

"The government's burden will also be eased, with the development costs taken over by MAHB which, at the same time, can forge cooperation with any party that is interested in investing in the industry," he said.