Plans for Iskandar to soar, Irda to develop it as aviation hub

JOHOR BARU - Iskandar Regional Development Authority (Irda) wants to promote, develop and position Iskandar Malaysia as the leading aviation-related activities hub in the region.

Chief executive officer Datuk Ismail Ibrahim said Iskandar Malaysia was now ready with the infrastructure required to meet the demand of the regional aviation growth.

He said the aviation industry had always been a sub-sector promoted by Irda and falls under Flagship E, where Senai International Airport serves as the gateway and catalyst for the sector's development.

"The development of the aviation sector is very much in line with the high-impact development objectives of Iskandar Malaysia,'' Ismail told StarBiz.

He said the sector could soar to new heights by capitalising on synergies with the surrounding economies and competitiveness of infrastructure and resources offered by Iskandar Malaysia.

Ismail said that for this to be successful, Irda needed the support of other stakeholders such as Senai International Airport and the airlines such as Malaysia Airlines, AirAsia and Firefly.

He said the Transport Ministry, Tourism Ministry and even Home Affairs Ministry also have to come in to manage and streamline matters such as landing permits, visa ruling and flight incentives.

"To enhance the value propositions of the aviation sector in Iskandar Malaysia to airlines and industry players, dynamic policies and robust industry and business plans must be put in place,'' said Ismail.

He said these were necessary to effectively promote the region and its aviation infrastructure, and to compete with other regional airports and aviation parks in order to attract flights and service providers to Iskandar Malaysia.

On why only now does Irda want to promote the aviation sector and not at the initial stage when Iskandar Malaysia was launched on Nov 4, 2006, Ismail replied that at that point in time, the aviation infrastructure was not ready to be promoted at the international level.

He said the local industry was also correcting itself to accommodate the (then) new low-cost carrier (LCC) business model.

Ismail added that in 2010, the global aviation industry was facing a slowdown as a result of industry consolidation and high fuel price.

"Nevertheless, the industry has recently emerged from the sluggish period and is now set to grow aggressively, especially in the Asia-Pacific region,'' he said.

Ismail said the aviation industry in Asia Pacific was growing exponentially, driven by the success and growth of LCCs such as AirAsia and Lion Air.

He said the growth of aircraft population in the region was also driving up demand for aircraft maintenance repairs and overhaul (MRO) services.

Ismail said that apart from demand for narrow and wide-body commercial aircraft, deliveries of business and light jets to this region were also growing, notably in China.

He said the value of the MRO industry in the Asia-Pacific region was expected to double to more than US$20bil (S$24 billion), at par with the industry value in traditional markets in Europe and North America.

Ismail said international MRO service providers especially European companies were also looking to set up bases in the Asia-Pacific region to be closer to their customers or simply as a cost-effective expansion to their existing operations in Europe.

"Senai Airport can offer MRO service providers with bigger space at comparatively lower investment and operational costs; hence allowing them to expand their customer base and increase revenue,'' he said.

Ismail said currently aviation parks in the region that accommodate the global aviation industry players, such as those in Singapore, Hong Kong and Malaysia (Subang) were facing land constraints while Australia labour law and strong workers union had made operations there costlier.

He said over the last seven years, the management of Senai Airport had privately invested more than RM350mil to upgrade the facilities at the airport.

These investments included the extension of the runway to up to 3,800m, the construction of a cargo complex, the enhancement of the main terminal building and the site preparation for an aviation park.

Senai Airport can now accommodate the biggest passenger aircraft, the Airbus A380, and the biggest cargo aircraft, the Antonov 225. The airport has the capacity to handle 3.5 million passengers and 80,000 tonnes of cargo annually as well as 20,000 sq m of apron space for aircraft parking.

"We are also looking forward to the implementation of the ASEAN Open Skies policy which will take effect in 2015. It is envisioned that the ASEAN region will see faster traffic growth and connectivity when the ASEAN sky is liberated in 2015,'' said Ismail.

He said Iskandar Malaysia may need an aviation blueprint to help focus the effort, but it would be in line with the national level one.

Ismail said it was more important that the aviation sector in Iskandar Malaysia produced visible and tangible results based on those plans.

"Irda and Senai Airport have formed an aviation focus group that meets regularly and engages other industry stakeholders from the public and private sectors,'' he said.