Kuala Lumpur International Airport: The New
Southeast Asia Airline Hub?
Lev Pinelis, M.S. Transportation
December 7th, 2004
1.231 Airport Systems Planning, Design, and Management
Malaysia’s 2020 Vision
Petronas Towers,
1998
$3.5 Billion Kuala
Lumpur
International
Airport (KLIA),
1998
Mahathir
Mohammad, 4th
Prime Minister of
Malaysia (19812003)
Developed Nation by
2020
Topics
• Asian air traffic trends
• Kuala Lumpur International Airport’s (KLIA)
efforts to make KLIA airline hub
–
–
–
–
Airline-related efforts
Airport-related efforts
Economic efforts
Promotional efforts
• What is the action plan?
U.S., Europe, and Asia are the Big 3
Regions for Aviation Activity
1
2
3
http://www.esri.com/mapmuseum/mapbook_gallery/volume19/transportation7.html
More Growth in Asia
Regional share of global international scheduled air passenger traffic in 2005
Data Source: ICAO
Compare 5
Airports in
Southeast
Asia:
• Kuala Lumpur
• Singapore
• Hong Kong
• Bangkok
• Jakarta
http://library.tamu.edu/vgn/images/portal/cit_
746/46/9/2935017ciaSEAsia.jpg
Airport Traffic for Each Airport,
1994-2003
Total Annual Passengers -- International and
Domestic
Passengers per Year
(millions)
40
KLIA
Singapore
Honk Kong
Bangkok
Jakarta
35
30
25
20
15
10
5
0
1994
1995
1996
1997
1998
1999
Year
Data: ICAO, ACI, www.airwise.com
2000
2001
2002
2003
What are the Efforts Being Made by
KLIA?
• Airline-related efforts
–
–
–
–
Development of Malaysia Airlines (MAS)
Seeking strategic foreign partner for MAS
Low-Cost Carrier focus?
Landing and Parking fee waiver
• Airport-related efforts
– More shopping facilities at KLIA
– Construction of Express Rail Link (ERL) from Kuala Lumpur city center
to KLIA
• Economic efforts
– Development of the 25,000 acres of land surrounding KLIA
– Air cargo focus?
• Promotional Efforts
– General promotion of KLIA
– Marketing for tourism
Success of Malaysia Airlines (MAS)
is Important to KLIA
• A strong national airline is important to
the strength of the country’s airports
• Cathay Pacific (Hong Kong), Singapore,
and Thai Airlines amongst the strongest in
Asia
– Cathay Pacific is part of OneWorld Alliance
– Singapore and Thai Airlines are part of Star
Alliance
Singapore
(Star
Alliance)
Hong Kong
(OneWorld
Alliance)
American Airlines
X
X
United Airlines
X
X
North America Top airlines
KLIA
Delta Airlines
X
X
Continental Airlines
X
X
X
X
US Airways
Southwest Airlines
America West
Alaska Airlines
X
X
Northwest Airlines
Air Canada
Bangkok
(Star
Alliance)
X
Singapore
(Star
Alliance)
Hong Kong
(OneWorld
Alliance)
Bangkok
(Star
Alliance)
X
X
X
X
X
X
Qantas Airways
X
X
X
All Nippon Airways
X
X
X
Asia-Pacific Top Airlines
KLIA
Japan Airlines
Singapore Airlines
X
Cathay Pacific
X
X
X
X
Thai International
X
X
X
X
Korean Air
X
X
X
X
Malaysia Airlines
X
X
X
X
China Airlines
X
X
X
X
China Southern
X
X
X
Singapore
(Star
Alliance)
Hong Kong
(OneWorld
Alliance)
Bangkok
(Star
Alliance)
British Airways
X
X
X
Air France
X
X
X
X
X
X
X
European Top Airlines
KLIA
Lufthansa
X
KLM
X
X
X
Iberia
X
Alitalia
X
Virgin Atlantic
Condor
SWISS
X
X
X
Scandinavian Air
X
X
X
Strategic Partnership with Foreign
Airport Manager
• KLIA representatives have been trying to bring in an
•
established airport managing group as partner for
managing KLIA
Large airport operators have expressed interest:
–
–
–
–
British Airport Authority (BAA)
ADP of France
Schiphol Group
Operators of Frankfurt Main
• Would likely increase foreign airlines presence at KLIA
• Increase chance of MAS joining Alliance
Low-Cost
Carriers are on
the Rise in Asia
• LCC traffic is booming
• KLIA is cheaper than
its stronger
competitors and will
have an opportunity
to draw in more LCC
traffic than the more
popular but more
expensive airports
Country
Low-Cost Carriers
Indonesia
Lion Air
Malaysia
Air Asia
Philippines
Cebu Pacific
Singapore
Valuair
Tiger Airways
Jetstar Asia
Thailand
NokAir
Orient Thai (AKA "One-Two-GO")
KLIA Offering 5 Year Fee Waiver
• In April 2002, Malaysia announced a 5 year
•
•
landing and parking fees waiver for new airlines
establishing service at KLIA
Offer also applicable for new flights established
by already housed airlines
Critics argue that this tactic is not effective
because savings will be negligible for most
airlines (expect Malaysia and Singapore Airlines)
Infrastructure Development around
KLIA
• KLIA is 60 miles
•
•
away from Kuala
Lumpur’s downtown
Express Rail Link
built in 2002 from
KL Center to KLIA
Development closer
to airport
– Putrajaya: New
government capital
– Cyberjaya: New
technology capital
http://www.railway-technology.com/projects/klia/images/kuala1.jpg
Improving Shopping at KLIA
• Source of revenue at airport
• Alluring for passengers
• But:
Airport
KLIA
Singapore
Hong Kong
Bangkok
Sales per
passenger
$5.74
$10
$9
$6.06
KLIA has Gained World-class
Reputation
• First year of operation, 1998: International
Air Transport Association (IATA) ranked
KLIA 15th best airport in the world
• 1999: IATA’s 10th best
• 2000: IATA’s 8th best
• 2003: IATA ranked KLIA as world’s 3rd best
airport
Taking Advantage of Tourism
• Tourism is an effective stimulant to a region’s air
•
traffic volume
Some targets:
– Chinese
– West Asian (Arabic) visitors
• Yemen Airlines, Qatar Airlines, Egypt Airlines, Kuwait Airlines
all began service 2002
• Emirates Airlines increased flight frequencies recently
– Ecotourists
Tourism Numbers
Arriving International Tourists in 5 Studied Regions
Tourists per Year (in
1000's)
20000
Malaysia
15000
Singapore
10000
Thailand
Indonesia
5000
Hong Kong
0
1990
1995
2000
Year
Data: World Tourism Organization
2001
2002
Most recognized by Travel Agents
www.asiamarketresearch.com
• Need for publicity?
Suggested Action Plan
1.
2.
3.
4.
Economic development
Tourism development
LCC focus
Malaysia Airlines growth, entrance into
one of the Alliances
5. Realistic Goals
Questions?