Loke's grand plan for Subang Airport expansion risks a crash landing

Just three months after returning to the Cabinet to head the transport ministry, Anthony Loke announced a grand plan to turn Subang Airport into a regional aviation hub.

Loke said the Subang Airport Regeneration Plan prepared by Malaysia Airports would focus on the development of the aerospace and aviation industry as well as to develop a city airport.

Among others, the plan aims for Subang airport to cater to five million passengers annually over the next four years, with capacity increasing to eight million by 2030.

Months later, major airlines, including budget carrier AirAsia, began flights from Subang as authorities allowed the operations of narrow-body aircraft at the airport in the hope of turning it into a centre for business travellers.

However, earlier this month, AirAsia announced that it would cease its domestic flights from Subang Airport and focus on Kuala Lumpur International Airport Terminal 2 (KLIA2).

"While Subang Airport has been convenient, especially for city-bound travellers, its redevelopment to support future growth will take time," the airline said.

The move has thrown a spanner in Loke's previously announced expansion plans, with aviation experts questioning its feasibility.

It also comes six months after the storm involving national carrier Malaysia Airlines, which saw a mini-exodus of its critical engineering staff following the government's decision to allow an aircraft maintenance company owned by Singapore Airlines to set up base in Subang, which is said to have lured them with better salary offers.

One analyst warned that the expansion plan in Subang could become a "costly, under-utilised investment" and even suggested that it could turn into a "white elephant".

Samirul Ariff Othman said there was a risk that airlines would not be able to fill the void left by AirAsia, adding that the government may need to reassess its projections and strategy.

"The departure of Malaysia’s largest low-cost carrier indicates that the airport’s current commercial jet strategy is struggling to generate sufficient demand or profitability.

"AirAsia’s statement suggests that KLIA2 is a more efficient hub for its operations, highlighting issues with Subang’s scalability for budget airlines," Samirul, of Global Consulting Asia, told MalaysiaNow.

With the departure of AirAsia, Subang will now rely on Firefly, Batik Air Malaysia, Transnusa and Scoot to sustain jet operations.

Samirul said the loss of AirAsia’s passenger traffic could weaken the airport’s ability to meet its expansion target of five million annual passengers within three to four years and eight million by 2030.

"While other airlines may apply for AirAsia's vacated slot pairs, it does not mean Subang will become a profitable hub. AirAsia’s decision to pull out suggests that Subang’s cost structure, passenger demand, and operational constraints do not align well with budget airline economics," he said, adding that other airlines could face similar profitability challenges.