AirAsia Bhd will shift its operations to Terminal 1 of the Kota Kinabalu International Airport (KKIA) next month, ending a two-year resistance to move to the RM1.7 billion complex.
People familiar with the development said the budget carrier is now negotiating with Malaysia Airports Holdings Bhd (MAHB) on office and commercial space rentals before the move, expected to happen by the end of October.
The Transport Ministry had to intervene and expedite AirAsia’s move to Terminal 1 due to the frosty relationship between AirAsia and MAHB.
“AirAsia had submitted some proposals to the Transport Ministry which include the airline building a low-cost carrier (LCC) terminal at the current Terminal 2 location.
“While all the proposals are being scrutinised, the announcement by the prime minister (PM) shuts all doors to the airline except to move back,” the source told The Malaysian Reserve.
Last week, PM Datuk Seri Mohd Najib Razak urged the LCC to move to the new terminal immediately.
Najib said AirAsia had exceeded the deadline.
The move is also crucial as the present Terminal 2 would be converted into a cargo hub.
However, it is believed that the airline has submitted a fresh proposal which contains a set of rules if they move to the upgraded Terminal 1.
The move is inevitable as Terminal 2 could not cater to the high number of passengers.
Built to cater for two million passengers per annum, the terminal saw 3.6 million passengers passing through its gates last year.
AirAsia was instructed to move to Terminal 1 in 2011, but had delayed the shift, citing cost and terminal constraints as the main reason.
However, MAHB gave a final deadline of Aug 1, for the airline to move but was ignored by AirAsia.
The LCC claimed that Terminal 1 would not be able to accommodate its future aircraft expansion plans including to bring its affiliate company, AirAsia X to Kota Kinabalu and make the airport its hub.
The South-East Asia’s largest LCC also said the higher operations costs at Terminal 1 will trickle down to its passengers.
AirAsia currently flies 518 flights to 10 international and eight domestic destinations.
Last year, Chinese nationals were the airline’s largest passenger load to Sabah at about 159,000, followed by Hong Kong, Taiwan and Indonesia.
The Terminal 1, built at a cost of RM1.7 billion, handled 3.19 million passengers last year.
Presently, 14 airlines are operating from the terminal which has 64 counters to service domestic and international flights.