news

Report: Future revenue loss of RM11.9b if MAHB loses Subang Airport

KUALA LUMPUR (May 8): Malaysia Airports Holdings Bhd (MAHB) “stands” to lose RM11.9 billion in future revenue if Sultan Abdul Aziz Shah Airport (pictured) in Subang, Selangor, is “carved out from its network of 39 airports in the country” The Edge Malaysia reported based on documents.

The document “Information memorandum Malaysia Aviation Group — Malaysia Airports’ Positioning on Development and Operations of Lapangan Terbang Sultan Abdul Aziz Shah Subang”, which was viewed by The Edge, revealed that MAHB “could lose out on current aeronautical and non-aeronautical revenue streams from Subang Airport, as well as future revenues forecast under MAHB’s Subang Airport Regeneration plan”.

“MAHB could also lose money from the cannibalisation of passenger movement from Kuala Lumpur International Airport (KLIA) to Subang Airport, incurring other incidental costs such as higher financing cost due to the downgrading of credit rating and access to funds, and loss of opportunity to synergise the operations of Subang Airport and KLIA,” stated the weekly based on the document.

The total estimated loss is approximately RM11.9 billion, according to the same report. And this “does not include the loss of confidence by investors in MAHB’s shares and bondholders that may restrict the group’s access to debt capital and equity markets, as well as potential erosion of shareholders’ value in terms of declining share prices”.

The document also revealed that “carving out” Subang Airport would be “earnings dilutive to MAHB as it will impact KLIA and Subang Airport, apart from losing a core business of the airport operator if the RM11.9 billion compensation is not granted”.

The Vibes newsportal reported last week that Subang Skypark Sdn Bhd (wholly-owned subsidiary of WCT Holdings Bhd) plans to re-concession Subang Airport, where it currently manages the SkyPark Terminal under a separate agreement with MAHB. The company is said to have made the proposal to the government via the Ministry of Transport (MoT).

Meanwhile, MoT said any proposal to redevelop Subang Airport is still in the preliminary stage and that the decision will be made by the Cabinet.

Read the full report in this week’s The Edge Malaysia

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.
SHARE
RELATED POSTS
  1. Covid-19: Malaysia's daily infections drop to 5,793, while recoveries hit new high of 8,334
  2. Covid-19: Malaysia reports 6,849 new cases; active cases come off the peak
  3. Khairy: Selangor to receive 25% of all Covid-19 vaccine procurements