Analyst questions feasibility of Subang airport's expansion after AirAsia pulls out seven months in

• The Subang airport expansion plan aims to increase capacity to five million passengers annually in three to four years, and up to eight million by 2030.

KUALA LUMPUR (March 6): Singapore-based Sobie Aviation independent analyst and consultant Brendan Sobie has questioned the viability of the Sultan Abdul Aziz Shah Airport's (pictured) expansion plans after AirAsia on Thursday announced that it is opting out after seven months.

AirAsia has decided to relocate its domestic jet services from the Subang airport to Kuala Lumpur International Airport Terminal 2 (klia2), effective April 7.

The low-cost carrier, which once pushed for jet operations in Subang, has decided to relocate to klia2 to optimise operations and improve the guest experience amid growing demand, it said in a statement.

AirAsia said the group closely assessed passenger trends and operational needs, and concluded that klia2 offers the best platform to enhance efficiency and service quality.

“While Sultan Abdul Aziz Shah Airport has been convenient, especially for city-bound travellers, its redevelopment to support future growth will take time,” it said in the statement.

The Subang airport expansion plan aims to increase capacity to five million passengers annually in three to four years, and up to eight million by 2030.

“The SZB suspension [by AirAsia] highlights the challenges of Malaysia’s domestic market, which can be very competitive and price-sensitive. It also highlights the flaws in the policy behind SZB's jet reopening. The suspension is a bitter pill to swallow for both AirAsia and the government, but is sensible because the SZB domestic jet operation has so far been highly unprofitable,” Sobie said in a post on Linkedin earlier.

SZB is Subang airport’s three-letter identifier used by the International Air Transport Association.

Sobie has long questioned the jet strategy for Subang airport stating that its yields have so far been way below average yields on the same routes from KLIA.

He continues to push for a reversal of the planned expansion at Subang airport and the first phase of its jet operations reopening, with an eye to improve the overall market.

“Prior to Covid, Malaysia’s domestic market suffered from overcapacity and irrational competition. This is again a problem with yields now down significantly year-on-year. Yields on some routes are even below 2019 levels despite significantly higher costs,” Sobie said in his post.

He acknowledged though that any reversal is unlikely to happen, with Batik Air Malaysia and Firefly likely applying to snap up AirAsia’s four slot pairs for strategic reasons.

AirAsia’s departure from Subang airport leaves four airlines operating jets out of the airport: FireFly, Batik Air Malaysia, Transnusa, and Singapore’s Scoot Pte Ltd.

Planning for a new home? Download a copy of EdgeProp’s guide to new launches — with more than 800 upcoming projects inside!