Why It Matters

Keeping air hub ahead of rivals

Malaysia has unveiled grand plans to transform land around Kuala Lumpur International Airport (KLIA) into an aviation hub with firms offering air cargo, logistics as well as aerospace and aviation services.

The KLIA Aeropolis will sit on a more than 400ha plot of land and is slated to open in phases from the early 2020s.

Will it give the Singapore air hub a run for its money? Unlikely.

This is not the first time Malaysia has initiated such a project. Just across the Causeway, plans to turn Johor's Senai airport into a major aviation hub have not taken off, despite initial fears that the development would trigger an exodus of businesses, including those at Seletar Aerospace Park.

A few Singapore-based firms have made the move but Seletar - which now houses more than 60 global and local firms - continues to grow.

Malaysian Transport Minister Liow Tiong Lai said at the project launch on Monday that the intention is not to compete with Changi Airport.

There is no need to, given the impending influx of planes to Asian airlines in the next 20 years.

United States planemaker Boeing forecasts that, of the more than 38,000 planes expected to be delivered to airlines in that timeframe, close to 40 per cent will land in Asia.

This will support the growing demand for air travel and provide plenty of opportunities for airports, as well as aircraft repair and maintenance firms across the region.

That is not to say that Singapore should take lightly the ambitions of Malaysia and other neighbours. It already has plans in motion to stay ahead of the curve.

Changi's handling capacity will more than double from 66 million passengers a year now to 135 million by the time Terminal 4 is ready next year and Terminal 5 opens at the end of the next decade.

The key to growing the Singapore air hub is in long-term planning and going all out to woo airlines and travellers, with an eye on what rivals are up to.

A version of this article appeared in the print edition of The Straits Times on May 25, 2016, with the headline 'Keeping air hub ahead of rivals'. Print Edition | Subscribe