Muhammad Asraf said consolidating operations at KLIA2 is the best option for AirAsia to save costs.
Dr Muhammad Asraf Abdullah
KUCHING (March 10): AirAsia’s decision to consolidate domestic operations at KLIA Terminal 2 from April 7 is expected to enhance cost efficiency and position the airline for long-term growth, especially for high-demand routes to Sarawak and Sabah, said Dr Muhammad Asraf Abdullah.
The senior lecturer at the Faculty of Economics and Business, Universiti Malaysia Sarawak (Unimas), said the move is financially sensible given AirAsia’s anticipation of increased passenger traffic from both states.
He said the splitting of operations out of Sultan Abdul Aziz Shah Airport (Subang Airport) and KLIA Terminal 2 for Kuching and Kota Kinabalu destinations may not be cost-efficient for AirAsia, as the airline must maintain high fixed and variable costs.
“Consolidating operations at KLIA2 is the best option for AirAsia to save costs while enabling the airline to handle a growing volume of traffic to and from both cities in the future.
“Additionally, with decent infrastructure at KLIA2 and other attractions like shopping and dining, leisure travellers are unlikely to mind flying through KLIA2 to reach Sarawak and Sabah,” he told The Borneo Post.
He said demand should not be significantly affected and any impact would likely be short term.
Business and leisure travellers who prioritise time-saving and are willing to pay more might choose airlines still operating out of Subang Airport, he added.
Last week, AirAsia announced it will relocate domestic services from Subang Airport to KLIA2 starting April 7, following a 16 per cent year-on-year surge in passenger volumes on key routes like Kuching and Kota Kinabalu.
The airline stated that the shift aims to optimise operations, meet growing demand, and enhance the overall guest experience.
Dr Nivakan Sritharan
Meanwhile, Dr Nivakan Sritharan, a lecturer at the Faculty of Business, Design and Arts at Swinburne University of Technology Sarawak Campus, said this move could trigger competitive shifts in the market.
“If competitors spot an unmet demand at Subang, they might step in, offering budget-friendly alternatives for price-sensitive travellers.
“Conversely, if no airlines fill the gap, AirAsia’s consolidation at KLIA2 may reduce competition, potentially leading to higher fares,” he said.
He noted that reducing the number of airports serving Kuching and Kota Kinabalu could limit consumer choice.
Passengers, particularly budget-conscious ones, might face not only higher fares but also increased travel costs, including longer travel times and higher ground transport fees when commuting to KLIA2.
Nivakan suggested that one way to sustain airline operations at Subang would be to lower airport operational costs for low-cost carriers (LCCs).
Reducing landing and parking fees, offering flexible slot allocations, or introducing fuel subsidies could help airlines manage expenses. Temporary waivers on airport charges for new routes from Subang to East Malaysia could also encourage more airlines to maintain services, he said.
On the policy front, Nivakan suggested that the government could support route development through temporary subsidies or revenue guarantees for airlines operating from Subang.
Tax incentives for LCCs and strategic branding to promote Subang as a low-cost travel hub could also boost passenger demand.
Muhammad Asraf added factors like passenger load factor, airport capacity during peak periods, and transport connectivity play a critical role in an airline’s decision to operate from a particular airport.
“Good connectivity, with various transportation options ensuring smooth travel to the end destination, is essential. Additionally, airport charges should be revised to reflect traffic volume and align with Subang’s status as a secondary airport,” he said.