MAHB to invest big in retail services

From the Business Times:

Malaysia Airports Holdings Bhd (MAHB) is planning a substantial investment to beef up its retail shopping and services to capture the higher revenue potential.

Its chairman, Tan Sri Dr Aris Othman, said a major renovation of its satellite building at the Kuala Lumpur International Airport (KLIA), is nearing completion.

According to Aris, MAHB will now focus on renovations to the main terminal building at the KLIA to enhance and modernise the retail facilities there.

"We realise we cannot rely on airport charges alone as it tends to remain stagnant or low, due to the competitiveness of many airports around the world," he said during the graduation ceremony of 194 airport security staff in Sepang today.
Aris said with the completion of the new low cost carrier terminal (LCCT) by the fourth quarter of 2011, a more enhanced shopping experience would be available.

Works on the new LCCT, he said, will commence next month and the total construction cost is RM2 billion.

He also said there would be no compromise in terms of airport security, despite the economic slowdown.

I actually think the new LCCT terminal will be a huge earnings boost for MAHB. The current LCCT seems built as cheaply as possible wihtout much regards to profit strategy. With the volume of passengers going through the LCCT, the profit potential of the airport is brought down by lack of retail space. The new LCCT should solve this problem and be a huge profit opportunity for MAHB.