GOVT TURNS DOWN NEW LCCT PLAN, SAYS SOURCES

KUALA LUMPUR, Jan 31 (Bernama) -- AirAsia Bhd's proposal to build a RM1.6 billion (US$445.1 million) airport in Labu in southern state of Negeri Sembilan has been turned down by the Government, but the low cost carrier managed to win some important concessions in the process, several sources said here Friday.

Malaysia Airports Holdings Bhd (MAHB) will be given the task of building a
new low cost carrier terminal (LCCT), which will be located near the present
terminal at KL International Airport (KLIA) in Sepang, said a source with
knowledge of the outcome of a meeting held Friday between AirAsia, the Ministry
of Finance and MAHB. Deputy Prime Minister and also Finance Minister, Najib
Razak, chaired the meeting .

The source said AirAsia managed to get assurance about lower airport charges
and tax, which it will negotiate with MAHB, and it will be also allowed to
provide some input on the specifications for the new LCCT.

He said the low cost carrier was given time to submit its wish list for the
new LCCT.

The charges could be lowered by as much as half.

AirAsia has been complaining about the charges at the present LCCT as it
reasoned that with less facilities available, the airport charges and tax should
be much lower than those imposed at KLIA.

At the meeting, AirAsia was led by its group chief executive officer Tony
Fernandes.

In a statement issued after the meeting, Tony said AirAsia regarded the
outcome of the meeting as very positive and that it was now awaiting the
details.

He said AirAsia was committed to providing its guest with world-class,
5-star service via a purpose-built LCCT.

He said AirAsia was also committed to making Kuala Lumpur a regional hub for
low cost carriers and contributing significantly to the growth of Malaysian
economy.

Financially, it is also good news for AirAsia, he said.

It already has a high gearing, and with this it does not have to seek
funding for the new LCCT, he added.
-- BERNAMA