Transport Minister Loke said the exact figures for the total cost of the expansion will only be determined after a tender process is undertaken by MAHB.
LANGKAWI: Penang International Airport’s (PIA) plans for expansion have been approved by the Cabinet and will cost more than RM1bil, says Transport Minister Anthony Loke.
He said the paper was presented for approval in terms of its funding model last week.
“The funding will be borne by Malaysia Airports Holding Bhd (MAHB) through an investment-recovery model,” he said to reporters during the launch of the Routes Asia 2024 aviation-route development event here yesterday.
According to Loke, the exact figures for the total cost of the expansion will only be determined after a tender process is undertaken by MAHB.
However, he also said some of the costs in terms of infrastructure will be borne by the Penang state government, including route expansion as well as infrastructure near the airport.
“We are hopeful this entire project can start immediately this year and we are looking at its completion in the next three to four years,” he said.
PIA currently has a capacity of 6.5 million passengers annually and the expansion will increase its capacity to 12 million passengers a year.
On another matter, Loke said that AirAsia had submitted a request to the ministry and had received preliminary approval to impose specific charges to offset the cost the use of sustainable aviation fuel (SAF).
He noted that unlike Singapore, Malaysia is taking a different path to this commitment.
“Singapore is purchasing SAF, which is very expensive. For airlines to adopt SAF, they definitely have to increase prices or impose charges on passengers,” he said. The charges are meant to be minimal and will be market driven as no one would want to fly should a high carbon tax be imposed, he added.
“This is not mandatory and something the airlines will have to decide for themselves in terms of their strategy and pricing mechanisms,” Loke said.
Loke added certain airlines will want to charge a certain carbon fee but his ministry will keep this as optional.
“There are other ways of reducing carbon emissions, such as operational efficiency. For example, how do we ensure that aircraft can take off and land in a more efficient manner, without taking too long, or cutting down landing and take-off times,” he said.
He explained this is something that needs the cooperation of air traffic management, which falls under the Civil Aviation Authority of Malaysia (CAAM).
“We just had a meeting last week with all the airlines and CAAM and a workshop will be held soon to examine how we can perform better. There are already a few measures in place but not all airlines are equipped with the software,” he noted.
Loke said, overall, the ministry is supportive of all the measures as a means to cut carbon emissions.
Routes Asia 2024, hosted by MAHB and Tourism Malaysia, was officially launched yesterday, bringing together more than 900 industry leaders and decision makers from airlines and airports globally to network and discuss air connectivity.
Routes director Steven Small said this year marked its 20th edition and is also the biggest Routes Asia event yet.
“Route development has perhaps become more important than it has ever been, with airlines scrutinising opportunities more carefully than ever before,” he said.
