BUDGET carrier AirAsia has disclosed it is in the midst of getting a dedicated low-cost carrier terminal (LCCT) in Bayan Lepas, Penang, by 2022.

Its group chief executive officer, Tony Fernandes, in a statement to announce the airline’s financial results for the second quarter ended June 30, 2018 yesterday, said the LCCT will drive its cost lower.

AirAsia already occupies 50% of the capacity at the Penang International Airport (PIA) and with the LCCT, the budget airline would “turn Penang into a key northern transit hub connecting directly from Southeast Asia to this state”, he said.

With the PIA reportedly having surpassed its maximum capacity of 6.5 million passengers per year – it is handling about 7.1 million arrivals now – and to cope with the increasing number, Finance Minister Lim Guan Eng said on August 6 the federal government was in talks with AirAsia and Malaysia Airports Holdings Bhd (MAHB) to build a LCCT next to PIA in one to two years.

Lim said the government was looking at the LCCT option as the proposed project would be fully funded by private companies, lessening the burden of the federal government.

He also said it would take a shorter time to build the LCCT than expanding PIA.

Lim said it would only take about one to 1½ years to build a LCCT, compared with about two to 2½ years for an expansion.

On its cost, AirAsia saw its cost per available seat kilometre (CASK), including fuel, increased slightly by 4% year-on-year to 13.77 sen in Q2.

Higher maintenance and overhaul and a 29% increase in fuel price contributed to the higher cost. – August 31, 2018.