MAHB Targets RM1b Revenue

By Anna Maria Samsudin

MALAYSIA Airports Holdings Bhd (MAHB) expects revenue from its commercial business to jump 50 per cent and breach RM1 billion in 2009, its top official said.

This is its target as it completes a retail optimisation plan – how it intends to make more money from running duty-free shops and renting out space for restaurants and bookshops, among others.

It is also the standard set by major airport operators worldwide. London’s Heathrow and Singapore’s Changi, for instance, make about 70 per cent of their revenue from retail operations.

Managing director Datuk Seri Bashir Ahmad said aside from retail and rental, MAHB also aims to grow revenue from property development and advertising.

“The reason we have to pursue such commercial revenue is to enable us to keep our charges low for the benefit of airlines and passengers,” he told Business Times in an interview.

MAHB, which operates the KL International Airport and 38 other airports in Malaysia, posted RM764.5 million in commercial revenue for 2007. This is already more than half of its RM1.39 billion million total revenue that year.

Senior general manager finance Faizal Mansor said the retail optimisation plan would add 10,000 sq metres of additional commercial area in KLIA.

This includes space at the low-cost carrier terminal (LCCT).

Of the total, about 30 per cent will be located in the main terminal contact pier, 6,000 sq metres in the satellite building and the rest in LCCT.

“Historically, airports in Malaysia were built mainly to serve as gateways and the focus is mainly to provide smooth passenger traffic flow, not so much on commercial aspects. The strategy is different now, where going forward, we will focus on commercial aspects and return on investment (ROI) in our planning.

“This is basically the strategy adopted by successful airports all over the world. For example, when the management of Heathrow Airport planned to build a new terminal, the study conducted prior to the construction has given much emphasis on the commercial aspect,” he told Business Times in an interview.

Last year, MAHB posted its highest ever net profit of RM270.6 million as revenue rose 21 per cent.

As for its planned property projects, it will have hotels and office blocks and initially use 11 per cent of the 9,800ha area surrounding KLIA.

The entire area is earmarked for commercial development, under the KLIA masterplan.

More details on the property project, as well as other revenue- enhancement projects, will be revealed upon the approval of its corporate and debt restructuring plan, Bashir said.

Bashir said it is crucial for the company to continue improving its services and operations to remain competitive in today’s more liberalised aviation landscape.

In addition, a recent announcement of the construction of a new terminal, Terminal 4 (T4), in Changi Airport, calls for MAHB to work harder to retain its position as the second Best Airport Worldwide.

“Singapore would indeed be a stronger competitor this year and because of that, we cannot afford to be complacent,” he added.

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