Return of the Labu

A little over two and half years ago, the right winger blogging community got together to strike at and on the proposal to create a dedicated LCCT airport in Labu, built on Sime Darby’s land. Attention was drawn onto the RM 1.7 billion proposed project, which eventually failed.

It was no big mystery which corporation was the prime mover behind the proposed project, which Sime Darby’s estates were to be developed into a modern LCCT airport complex. This include the extension to the purposed built ERL, connecting from the existing line to this Labu LCCT airport. It was a ridiculous proposition to have a high traffic commercial airport operating within 20 km soon to be congested airspace of runaways 14R/L and 32 R/L.  Even though Sime Darby was deemed to be taking the role of the primary mover of the said the proposal, it was believed that Air Asia wanted a dedicated airport of their own and under their management. Since low cost airlines have been on a consistent growth especially in Asia, it is an added highly lucrative revenue track for the group.

The same airline has been waiting a lot of things their way ever since they took over Air Asia from the hands of DRB Hicom seven years earlier.

They were lucky that they could manipulate their way around the Prime Minister PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi, with having personalities like Dato’ Kalimullah “Riong Kali” Hassan and the in-famous son-in-law Khairy Jamaluddin to support all their proposals and projects. Even though the proposal would effect GLCs such as national carrier.

Riong Kali is an integral and pivotal part of Air Asia

First it was the ‘Airline Rationalisation Plan’, which was tabled to the Cabinet by then Malaysia Airlines CEO Dato’ Idris Jala in May 2006. It was hijacked from the Prime Minister’s Office over the weekend and after a private meeting with PM ‘Flip-Flop’ Abdullah at the ‘Residence’, a fresh plan was resubmitted to the PM’s Office via then the Co-ordinator of Policy Ahmad Zaki Zahid. As a result, a lot of routes previously flown by MH were conveniently transfered to AK.

The deal cleancher the transfer of all heavily subsidised rural air service by Malaysian Airlines for Sabah and Sarawak interior operations. The transfer of these routes allowed Air Asia to rationalise the routes with the huge order of aircraft they had from France and satisfy their financial backers and strategic shareholders, 53% of them from outside the country.

Those extra high traffic routes was a basis for the airline to grow aggressively in the region. Having strong support of PM ‘Flip-Flop’ Abdullah’s administration means that  from that on, they almost got a ‘blank checque’. The low cost airline grew to do very well.

Now, they are on the prowl again. On top of the over-and-above achievement, they are not satisfied being crowned the ‘Best Low Cost Carrier’ in the world. They still wanted an LCCT hub of their own. They already benefited when PM ‘Flip-Flop’ Abdullah pandered to their whims and fancies by getting Malaysia Airports to build a (temporary) Low Cost Carrier Terminal (LCCT) when they refused to use the Main Terminal Building (MTB) of KLIA for their operations. Nevermind the RM 69 million aggregate arrears they owe Malaysia Airports.

Rafidah and Fernandes getting the PM to witness their acquisition of GE engines

Recently, they appointed former MITI Minister Tan Sri Rafidah A Aziz as the Chairman. She is now sitting in a position where Air Asia could benefit so much from the clout the Chairman still able to carry. previous, former Chief Secretary to the Ministry of Transport Dato’ Pahamin A Rejab was appointed because Air Asia wanted to expand. They needed routes, previously were provided exclusively for Malaysia Airlines. Without these routes, Air Asia would not able to have the frequency to reach the desired critical mass.

When Air Asia X was first formed, Riong Kali was appointed Chairman. The clout that he provided during the height of PM ‘Flip-Flop’ Abdullah’s tenure, Air Asia X grew very fast in the intercontinental airline market. Landing rights were accorded to them, which include high traffic destinations such as London and Melbourne. Rafidah’s appointment is also strategic. Air Asia X wanted the very lucrative Sydney and Jeddah routes. These routes have been proven to be highly profitable for Malaysia Airlines.

Fernandes and Riong Kali with Penang Chief Minister Lim Guan Eng

There is another strategic reason for Rafidah’s appointment. Air Asia still wanted an LCCT hub of their own. Recently, they managed to get Ipoh to be an Air Asia hub. However, the traffic in central Perak does not warrant for them to develop a full blown hub. The lucrative traffic would be on the northern sector of the Peninsula. For Air Asia to get a dedicated hub in Penang, would almost be near impossible as Malaysia Airports would not relinquish any additional facility of the airport to another operator. More over, it is high revenue generating facility.

This time round, it is believed that they are realising their ‘operating an LCCT airport’ via Perak State Government. Perak State Government under Dato’ Seri Dr. Zambry A Kadir is expected to make a formal requisition for a brand new LCCT airport to be developed in the north western corner of the state.

Air Asia changed their strategy to make Perak State Government their ‘Trojan Horse’. This proposal is much needed for Dr Zambry’s administration as since able to wrestle the State Government in a ‘reverse take-over’ operation in February 2009 (which was believed to be initiated and followed through by now Senior Exco Dato’ Hamidah Osman), not much achievement and progress recorded by the current administration. Infact, many hopefuls within his own senior state party leaders were left non chalant about his administration.

The most probable location is Parit Buntar, which is bordering to Penang. It is in the growth triangle of Northern Corridor Economic Region and the high industrial areas of Penang, Seberang Prai, Kulim and the PLUS highway from Juru to Taiping.

Rafidah is supposed to lobby for that. On top of that, highly controversial Ethos Consulting supremo Omar Ong, who is said to be very close to Prime Minister Dato’ Seri Mohd. Najib Tun Abdul Razak, has also been invited into the board of Air Asia. It is Fernandes’s style to bring personalities whom he could capitalised to be utilised for all the lobbying work required to derive at the said objectives.

Air Asia is also banking on the fact that post PRU 12, Penang fell to DAP control and the likeliness of BN capturing the industrial state is not too bright. Therefore, the development of an LCCT hub as an extension to the existing and recently renovated Penang International Airport is thought to be unlikely. At least in the short to medium term.

Dr Zambry has not been to successful in his administration of the state. Perak has yet to see any projects being developed, even more than two years after BN managed to wrestle control from DAP-puppet PAS MB Nizar Jamaluddin. The one-time Anwarista needed a large if not mega project to ‘earn his stripes’, for him to stay relevant in the state. Perakians are getting restless with his ‘academic approach’ of doing things, which has not translated into anything tangible yet. His Iskandar Darul Ridzuan and Yayasan Bina Upaya cronyism-infested programs are not convincing enough of its success. Dr Zambry is now plagued with cronyism issues.

The expected RM 1.8 billion brand new dedicated LCCT in Parit Buntar might do the ‘political magic’ for Dr Zambry to stay relevant. If the lobby is intense enough, then we shall see the ‘Return of the Labu’, which has now on the way evolving into a saga.

Published in: on April 28, 2011 at 16:27  Comments (11)  

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11 CommentsLeave a comment

  1. Zamry and his useless think-tank (IDR) are too desperate for quick win results, hence, promoting the idea of LCCT hub at Parit Buntar. And of course, with the KIND “assistance” of AP queen, Ms Raf.

  2. Another anti non Malay article just because Air Asia had been so successful compare to Malaysia Airline because it is well run by a non Malay who is recognized all over the world for his effort. Big Dog is certainly a racists.

    • No.The media needs heroes to sell their toilet paper to gullible readers, so it glorifies the achievements of Air Asia management but conveniently leaves out or overlooks that its success would not have been possible without the backing of the Pak Lah faction of UMNO leaders which has given AirAsia lots of concessions, even at the expense of the MAS, the national airline.

      What’s happening here is that Big Dog who supports the Tun Mahathir faction of UMNO is hitting back.

      Since the Anwar faction of UMNO was booted out of UMNO in 1998, the UMNO-UMNO faction fights have spiced up Malaysia politics better than a platefull of chillie padi can, while Pakatan-BN fights have been rather mild in comparison.

      Someone should make a TV mini-series UMNO vs UMNO, which I’m sure will rake in millions worldwide, beating any Hollywood production.

      • Sardonically…. look at what Malaysians can achive when they quit thinking about politics, race, etc. And focus on how to make money together … even at the expense of MAS and MAB, who both need a kick in the butt for behaving like oversized monopolies. Stop cslling one another racists, there’s no end to it. Work together, make money,and don’t screw the country in the process.

  3. […] its true that Air Asia is using Perak State Government to lobby for a dedicated low cost carrier airport in place of the failed proposed ‘Labu LCC Airport’, then this new proposal should […]

  4. […] and PM’s blue-eyed-boy Omar Ong into the BOD. Then it was about trying very hard to get the ‘replacement Labu’. Rumour has it that Fernandes ‘threatened’ to move his HQ to Jakarta was calling a […]

  5. […] And he did not stop there. He was said to try his luck using Perak Menteri Besar Dato Seri Dr Zambry A Kadir. Parit Buntar is the most commercially viable spot for the dedicated LCCT airport for the North. […]

  6. […] desire to control a dedicated airport never died. Then, he was to said to have manipulated the Perak State Government for a Labu similar airport near Parit Buntar, which is in the captive market of the lucrative travelers’ market of Penang and […]

  7. […] All of this is about ‘wayang‘. The crux of the matter is that, Fernandes wanted to operate his own airport. He has been harboring this intention since three years ago, when he got Sime Darby to pitch for a dedicated low cost carrier airport in Labut approvahe Malaysian Government. When that failed, he tried for Penang International Airport. Then, he tried to coax Perak State Government to demand of a dedicated low cost carrier somewhere near Parit …. […]

  8. […] Fernandes been wanting his own airport, as part of his airline business synergy. When his bid for a dedicated low cost airport in Labu via Sime Darby was shot down and the attempt on taking over Penang International Airport failed, he […]

  9. […] bid for the dedicated low cost carrier airport in Labu, shot down exactly three years ago. He has never stop from harbouring the wet dream of his own […]


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