SEPANG: Malaysia Airports Holdings Bhd (MAHB) is eyeing a total investment of about RM1.3 billion to regenerate Subang Airport into "more than just a city airport".
MAHB subsidiary KLIA Aeropolis Sdn Bhd general manager Randhill Singh said the investment was on the card as the airport operator would want to generate greater yields from leasing its facilities within the ecosystem.
KLIA Aeropolis has been tasked to undertake land development for MAHB's network of airports nationwide.
The regeneration will be over five years, with the RM1.3 billion coming from internally-generated fund, borrowings and via partnership from industry players.
Randhill said the five-year masterplan was part of MAHB's initiative to establish Malaysia as the aerospace and aviation hub in Asia Pacific.
"It is imperative for Malaysia to consolidate its position as a hub across these segments namely business and commercial aviation, helicopter ecosystem, air cargo and e-commerce logistics, centre of aviation new technologies, aerospace manufacturing and maintenance, repair and overhaul (MRO) in the region," he said at a media briefing here yesterday.
Randhill said the initial development for the masterplan would begin in early 2022 with the setting up of two MRO facilities slated to be operationalised by 2023.
"The MRO facilities are for helicopter, light aircraft and business jets in Subang Airport. We will announce the two MRO players under a few agreements that will be signed in the coming months," he said.
Randhill said the investment would be mainly for lettable building facilities such as hangar, factories, aerospace manufacturing plants and MRO.
"Upon completion, we will have about 8.0 million sq ft in additional capacity (space) for airside, landslide and common infrastructure facilities," he added.
Randhill said the masterplan development would cover about 250 acres out of the total 400 acres available for industrial development.
This in turn was expected to generate about RM5 billion in economic output in the next five years, he added.
"Currently, we have developed about 60 acres, representing 25 per cent of the total development of 250 acres. We expect a payback in 10 years for the whole development.
"We have secured 40-50 per cent take-up rate for tenants within the entire development for both airside and landside," he said, adding that the new facilities would able to accommodate 89 single-aisle aircraft and helicopter on a dedicated apron and common use apron.
Randhill said MAHB would not be looking at expanding the Subang Airport significantly but rather embarking on Airports 4.0 initiative, optimising the existing space and utilising technology to cater to a growth of 5.0 million passenger per annum (mppa).
"Subang Airport regeneration unlocks growth potential to capture emerging Asia Pacific market. The airport is currently congested as it was designed for 1.5 mppa and during the pre-Covid-19 pandemic, as traffic has reached up to 3.0 mppa, almost doubling its capacity.
"We have to prepare for the recovery and resumption for normal operations. We have to rejuvenate the current airport ecosystem while maximising its potential opportunities," he said.
Subang Airport has over 60 aerospace and aviation companies involving turbo prop, business aviation, helicopters, MRO (ATR and business jets), aero-manufacturing and logistics.
"The ecosystem generates about RM1.7 billion of annual revenues with 4,000 of high-skilled jobs. We expect the workforce to triple over the next five years," he said.
He said the comprehensive masterplanning for Subang regeneration had begun in 2018.
MAHB has had over 100 engagements with the stakeholders and operators including current and future tenants and operators.