Tan Sri Bashir Ahmad - Session 1: The Global Airport Cities Report: The Latest Project News With A Special Focus On Lessons Learned In Overcoming Major Challenges

KLIA AEROPOLIS

1 April 2014

Malaysia Airports is one of the world’s largest private sector airport operators, managing

39 airports in Malaysia and having investments in airports in several other countries

(currently in India and Turkey, and previously including Maldives, Kazakhstan and

Cambodia)

Consistently won awards for service quality of airports

One of the more profitable Government Linked Companies on Bursa Malaysia

Market capitalisation of over RM10.9 billion / USD 3.3 billion (as of 28th March 2014)

Malaysia Airports

Background

Malaysia Airports is the concession holder of KL International Airport (KLIA) and the

lease holder of the airport lands

In 2013, Malaysia Airports served over 79 million passengers, where KLIA served about

47 million passengers (19.1% growth YoY)

A total of 63 airlines operates out of KLIA serving more than 100 destinations

KLIA is ranked 20th busiest airport in the world for 2013

Malaysia Airports

KLIA Connectivity

In the early 1990’s, the Government of Malaysia made a brave and highly astute move to locate KLIA in a

greenfield development of nearly 100 square kilometres, located about 60 kilometres from the city

centre.

KLIA was opened in 1998 with a speed train from inside the terminal that connects it directly to the city

centre’s integrated multi-modal transport hub to ensure connectivity to KL’s long-term, greenfield airport

was not compromised.

Fifteen years and 20 million more passengers later, KLIA has matured just in time to begin developing

6,750 acres of developable land around the airport into a standalone airport city, known as KLIA

Aeropolis.

Today, Malaysia Airports is afforded the responsibility to ensure that this highly lucrative location is

optimised to maximise Malaysia’s unique position as a regional if not global leader of a leading shopping

destination; a Muslim-friendly tourism destination and thus by extension potentially the most family-

friendly tourism destination; and a leading logistics and business hub.

This would potentially propel the KLIA Aeropolis into a destination in its own right.

KLIA Aeropolis

Background

Huge Land

Bank

• 22,156 acres of land at KLIA with 6,000 acres already developed

• 6,750 acres approved for landside commercial development

• 25 years land lease tenure – approval for up to 60 years on a case-to-case basis

• Trending towards KLIA and its surrounding Putrajaya, Cyberjaya, Science Park,

Sepang Gold Coast, etc.)

• Growing demand

• Passengers and “meeters & greeters”

• Extensive yet still growing terminal-linked activities

• Over 22,000 airport workforce (direct and indirect)

• Existing and new residents just outside the Aeropolis border

• Airport creates significant employment, shopping, trading and new business

destinations

• Multi-modal transportation hub within/linked to the airport terminals

• Network of modern, up to eight-lane highways

• Speed train connects the city centre to the terminal in 28 minutes

• Good connectivity via coaches and taxis

Surrounding

Development

Catchment

at Airport

Community

Airport’s

Accessibility

KLIA Aeropolis

Opportunities

KLIA Aeropolis

Development Challenges

Economic:

• Short land lease tenure

• Infrastructure development/ funding

Geographical:

• Greenfield Location

• Maturity of surrounding development,

given that KLIA is located some 60 km

from the city center

Regulatory:

• No residential development

• Land for lease only

Economic:

• Case by case basis to allow for longer

concession by the Gov’t;

• Currently reviewing alternative

approaches to co funding/investments

: Geographical:

• Focused on airport and related facilities/

infra development

• Palm oil plantation – a most profitable

interim land use measure

• Catalyst projects – Gateway@klia2;

MOP KLIA

Regulatory:

• Aligning ‘incentives’ with regulators/Gov’t

• Crucial to partner with credible

developer/operators

Challenges Mitigation

Malaysia Airports New Vision:

‘To be the

Global Leader in

Creating Airport Cities’

moving forward…

Our new vision of becoming the Global Leader in creating Airport Cities is centred on our competitive

advantages:

1.Available land bank, resultant from Government’s foresight.

2.Strong travel and robust tourism market.

3.Strong home base carriers that support the airport business.

4.Competitive price structure - our airports offer the best value in the region.

5.Management leadership/expertise - successfully positioned KLIA for growth in the face of traditionally

strong competitors - Bangkok (strong leisure destination) and Singapore (financial hub) by:

(i) Establishing strategies to support low-fare travel at the time it was untested in Asia; and

(ii) Timely investments in terminal and airside capacity and infrastructure.

• KLIA is now the only airport in South East Asia region to boast three independent runways.

• klia2 being designed as a "future-proof" terminal to cater to all variants of LCC models and

robust pax growth.

6.Stable socio-economic and political environment in Malaysia.

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Malaysia Airports New Vision

Leveraging On Our Competitive Advantages

‘To be the Global Leader in Creating Airport Cities’

Vision

Strategy Themes

Delight Our Guests

Provide Total Transport & Digital

Connectivity

Build Successful

Partnerships

Sustain Our Environment and

Community

Accelerate and Diversify Our

Non-Aero Base

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Malaysia Airports New Vision

Vision to Strategy Map

Category Land Size

Cargo / Logistics Park 300+ acres

Office Suites & Serviced suites, Hostels

100+ acres

Hospitality, MICE 200+ acres

Theme Park 500+ acres

Institutions 300+ acres

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Malaysia Airports New Vision

Development Highlights

Thank You