MAHB Refutes AirAsia Statement

MAHB refutes AirAsia’s statement
Written by Max Koh  
Tuesday, 06 December 2011 11:36

KUALA LUMPUR: Immediately after AirAsia Bhd claimed that it did not ask for a fully automatic baggage handling system (BHS) in KLIA2, Malaysia Airports Holdings Bhd (MAHB) came out to defend its position on the matter.

In a statement issued yesterday evening to counter AirAsia’s statement sent out earlier in the day (read above story), MAHB provided documents to show that AirAsia had indeed requested to change the BHS in KLIA2 from a semi-automated to a fully automated one, which would result in the delay of KLIA2 completion and cost overruns.

The letters also highlighted that AirAsia had projected the KLIA2 to have more than 35 million passengers per annum within five years of opening day.

MAHB provided a letter dated June 16 from AirAsia group CEO Tan Sri Tony Fernandes, which stated that AirAsia opted for a fully automated BHS after considering three options given by MAHB.

The AirAsia letter read: “Our official response to MAHB is that AirAsia prefers that the BHS system be developed as shown in BHS Option 3: Dual Tilt Tray Sorter with Full Connectivity (fully-auto BHS). There are two principal reasons why we have chosen this approach, and they both have to do with insuring that the AirAsia group has a BHS system which has the capacity and flexibility to support our continued growth and development.”

In the letter, AirAsia had also said it had developed a state-of-the-art passenger and baggage check-in system, which would be rolled out at the new KLIA2.
The airline and airports operator, helmed by Tan Sri Tony Fernandes (left) and Tan Sri Bashir Ahmad respectively, tell their side of the KLIA2 story.

AirAsia also stated its new projections that KLIA2 would have more than 35 million passengers per annum within five years of opening day (by 2017). It added that the capacity must be installed at the onset of completion of KLIA2 as it would be difficult to expand the BHS system within five years of opening.

“We recognise our decision to select the most powerful BHS system option may have certain impact on the current work at the PLCCT (KLIA2). However, the evolving nature of our business requires a high level of strategic agility for our continued growth and success,” said the AirAsia letter.

MAHB also provided a letter dated Oct 10 that it wrote to AirAsia X Sdn Bhd chairman Tan Sri Rafidah Aziz. In the letter, MAHB said AirAsia’s request to change the BHS from semi-automated to fully automated would delay the progress of the KLIA2.

“MAHB had a meeting with AirAsia and AirAsiaX on July 1. MAHB had highlighted during this meeting that with the current progress of the development of KLIA2 having reached almost 40% as per the completion timeline by October 2012, any material changes in the BHS system would most certainly impact the completion date of the project,” MAHB said in its letter to Rafidah.

The delay is due to the reworking of the terminal design and layout, MAHB added.

The MAHB letter further said that in order to reduce the delay of KLIA2 completion, MAHB and AirAsia contemplated on a modified version of option 2 (semi-auto BHS) which would incorporate certain features from option 3 (full-auto BHS).  MAHB said the modified version 2 would satisfy AirAsia’s immediate operational needs but not its long-term needs.

MAHB noted that during its board meeting on July 4, the board had decided to proceed with Option 3, as it was concerned that “AirAsia’s position could very well change in the future” and it would be difficult to accommodate any changes then.

MAHB conveyed its board’s decision to AirAsia on July 6.

It also required AirAsia’s confirmation on its willingness to use the full Baggage Source Message system (BSM) and the Common Use Passenger Processing System (CUPPS) that is needed for a fully-auto BHS.

“Although we received AirAsia’s confirmation to comply with the BSM requirements on Aug 18, AirAsia’s response on the CUPPS is still outstanding and this could further delay the upgrade of the BHS beyond six months,” said MAHB.

This article appeared in The Edge Financial Daily, December 6, 2011.
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