Penang budget terminal proposal gets thumbs up

BUDGET carrier AirAsia Bhd's (5099) proposal to build a low-cost carrier terminal (LCCT) in Penang has received the thumbs up from industrialists and tourism players on the island state.

While industrialists are hailing the proposal as an answer to better flight connectivity and a magnet to lure more investors to the state, the tourism sector is hoping that the proposed LCCT will boost tourist arrivals and serve to insulate the uncertain economic outlook.

"If Penang gets an LCCT, its residents will definitely be the major beneficiaries," Federation of Malaysian Manufacturers (northern region) Datuk O.K. Lee told Business Times yesterday.

"While there are currently quite a number of cheap flights to China and other locations, they all require us to use the LCCT in Kuala Lumpur to depart, resulting in higher costs.
"I hope an LCCT for Penang means that Penang residents and its visitors get to fly at low cost even to Europe, Australia and other Asian countries, directly," he added.

At a separate function, Penang Chief Minister Lim Guan Eng said he welcomes AirAsia's proposal to set up the budget terminal on the island.

New Straits Times yesterday reported that AirAsia was lobbying the Penang State Government for an LCCT, within the vicinity of the existing Bayan Lepas International Airport on the island.

The proposed budget terminal is estimated to cost RM120 million, excluding the cost of land, sources had said.

Malaysian International Chamber of Commerce and Industry (northern region) chairman Datuk Seri Nazir Ariff Mushir Ariff said it is crucial for Penang to get an LCCT immediately for its tourism industry to boom.

"In order for Penang to get investors and tourists in a big way, people need to be connected by direct flights," he said, adding that the cost of doing business in Penang will also become competitive in the long-run.

Malaysia Association of Hoteliers' Penang chapter chairman Marco G. Battistotti said the provision of an LCCT for Penang is a good strategy since the regional market for tourism arrivals is growing and Malaysia can tap into this.