Airport in Penang must expand to cater to higher number of tourists

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It’s exciting that Penang is getting ever more connected to the rest of the world. Truth is, the growth of this little state (plus mainland) depends on connectivity and with the Penang International Airport (PIA) having reached its maximum capacity, expansion has been long overdue.

We must understand that if PIA gets too busy, it’s pointless to keep pushing for a higher number of visitors. Even medical tourism which Penang is dominant in cannot grow if patients have to fly to other cities, then take a coach to Penang.

According to an article in the NST, Finance Minister Lim Guan Eng said PIA will undergo an expansion exercise so it can accommodate 16 million passengers annually.

Last year PIA handled 7.8 million passengers despite its current capacity being only 6.5 million. This will attract more international airlines to fly into Penang.

However he shared that the federal government was short on funds and thus expansion of the airport would be based on a private finance initiative (PFI). The cost of this expansion will be more than RM1.2 billion.

He said, “We will open the tender for the expansion project this year. We hope that the process can start this year and the private company appointed by the end of this year. A PFI will help us undertake the expansion project more efficiently as well as save our cash resources.”

Kulim International Airport (KXP) will also be coming up. Both airports should be complementary instead of compete with each other because lots of money is being invested into both, and these two airports are less than an hour away from each other.

Bear in mind that it’s highly unlikely for an airline to fly in to PIA, then take off and touch down again in KXP.

In other words, the menteri besar of Kedah and the chief minister of Penang have to be very clear about how to operate their respective airports in a productive manner.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.