azharuddin abdul rahman, director general of civil - Airports Council ...

ADDRESS BY DATO’ AZHARUDDIN ABDUL RAHMAN, DIRECTOR GENERAL OF CIVIL
AVIATION MALAYSIA AT THE 19 TH ACI WORLD ANNUAL GENERAL ASSEMBLY & ACI ASIA –
PACIFIC CONFERENCE, 3 NOVEMBER 2009
MR. JAMES CHERRY
CHAIRMAN, ACI WORLD
TAN SRI BASHIR AHMAD
MANAGING DIRECTOR, MALAYSIA AIRPORTS
DISTINGUISHED PARTICIPANTS
LADIES AND GENTLEMEN
IT IS INDEED A PLEASURE FOR ME TO BE HERE AND ADDRESS PARTICIPANTS AT THE 19 TH ACI
WORLD ANNUAL GENERAL ASSEMBLY & ACI ASIA – PACIFIC CONFERENCE TODAY. I WOULD
LIKE TO TAKE THIS OPPORTUNITY TO THANK AIRPORTS COUNCIL INTERNATIONAL AND
MALAYSIA AIRPORTS FOR THE OPPORTUNITY TO SAY A FEW WORDS.
AVIATION CONTRIBUTES MUCH TO THE GLOBAL ECONOMY. THE CIVIL AVIATION INDUSTRY
ACCOMMODATES THE TRAVEL NEEDS OF MILLIONS OF INDIVIDUALS AND ALSO BUSINESSES
THAT NEED SPEEDY DELIVERY OF CARGO. THE INDUSTRY HAS EXPERIENCED RAPID
EXPANSION ALONG WITH THE GROWTH OF THE WORLD ECONOMY. CIVIL AVIATION ALSO
ACTS AS AN ECONOMIC CATALYST FOR LOCAL, REGIONAL AND NATIONAL ECONOMIES
AROUND THE WORLD. THE DEMAND FOR AIR TRANSPORT SERVICES IS HIGHLY CORRELATED
WITH ECONOMIC DEVELOPMENT.
2007 WAS A GREAT YEAR FOR CIVIL AVIATION. HOWEVER THE REALITY TODAY IS QUITE
DIFFERENT. THE HIGH COST OF FUEL AND THE GLOBAL FINANCIAL CRISIS AND RECESSION
HAVE CONTRIBUTED TO AVIATION TODAY BECOMING MORE CHALLENGING AND COMPLEX.
AVIATION TODAY IS AT A CRITICAL JUNCTURE. THERE ARE NUMEROUS ISSUES FACING THE
INDUSTRY. THE THEME FOR THE CONFERENCE TODAY “ABOVE THE TURBULENCE ‐
SUSTAINING BUSINESS EXCELLENCE” IS INDEED AN APPROPRIATE ONE, GIVEN THE STATE OF
THE INDUSTRY AND THE CHALLENGES AHEAD.
IN STUDIES DONE BY IATA, GLOBALLY AIRLINES SUFFERED LOSSES OF US$ 10.4 BILLION IN
2008 AND WERE INITIALLY EXPECTED TO LOSE ANOTHER US$ 9 BILLION IN 2009. IATA NOW
EXPECTS LOSSES FROM COMMERCIAL AIRLINE OPERATIONS WORLDWIDE TO REACH US$ 11
BILLION.
ICAO FORESEES SCHEDULED TRAFFIC ON DOMESTIC AND INTERNATIONAL FLIGHTS OF
AIRLINES WORLD WIDE, MEASURED IN TERMS OF PASSENGERS KILOMETERS PERFORMED,
TO INCREASE AT AN AVERAGE ANNUAL RATE OF 4.6% FOR THE PERIOD 2005 – 2025. TOTAL

FREIGHT TRAFFIC, MEASURED IN TERMS OF FREIGHT TONNES KILOMETERS, FOR THE SAME
PERIOD IS FORECAST TO GROW AT 6.6 % PER ANNUM. HOWEVER FOR THE YEAR 2008,
PASSENGER KILOMETERS PERFORMED WAS ONLY 1.3% HIGHER THAN 2007. GLOBAL AIR
TRAFFIC IS EXPECTED TO DECLINE FURTHER IN 2009 WITH A NEGATIVE GROWTH OF 0.8%.
PASSENGER KILOMETERS PERFORMED HOWEVER, IS EXPECTED TO RECOVER IN 2010 AND
2011 WITH ANNUAL GROWTH RATES OF 3.3% AND 5.5% RESPECTIVELY.
IN MALAYSIA, FOR THE PERIOD 1999 – 2008, PASSENGER MOVEMENTS AT AIRPORTS IN
MALAYSIA INCREASED FROM 29.47 MILLION TO 47.45 MILLION. FOR THE SAME PERIOD,
TOTAL CARGO HANDLED AT AIRPORTS IN MALAYSIA INCREASED FROM 658,233 METRIC
TONNES TO 934,440 METRIC TONNES. FOR THE PERIOD JANUARY TO SEPTEMBER 2009,
CARGO MOVEMENTS RECORDED AT AIRPORTS IN MALAYSIA WAS 574,658 METRIC TONNES.
THIS FIGURE IS 20.7% LOWER COMPARED WITH THE CORRESPONDING FIGURES IN 2008.
TOTAL PASSENGERS HANDLED AT AIRPORTS FOR THE SAME PERIOD IN 2009 WAS 36.8
MILLION. THIS IS HOWEVER 5.2% HIGHER THAN 2008.
LADIES AND GENTLEMEN
CIVIL AVIATION INCLUDES AIR TRANSPORT, NON COMMERCIAL FLYING, NON COMMERCIAL
TRANSPORT, MANUFACTURING AND INFRASTRUCTURE SUCH AS AIRPORTS. AIRPORTS ARE
A CRUCIAL COMPONENT OF CIVIL AVIATION. AIRPORTS HAVE A STRATEGIC ROLE IN THE
ECONOMIC DEVELOPMENT OF A COUNTRY. ECONOMIC GROWTH HAS A DIRECT
CORRELATION TO PASSENGER TRAVEL AND CARGO HANDLED AT AIRPORTS. PASSENGER
TRAVEL AND CARGO HANDLED AT AIRPORTS ARE CLOSELY LINKED TO ECONOMIC
DEVELOPMENT. AS PASSENGER AND CARGO VOLUMES INCREASES, SO DOES THE IMPACT
OF AIRPORTS ON THE ECONOMY. EVEN LAND DEVELOPMENT AROUND AIRPORTS
GENERATES ECONOMIC ACTIVITIES. OVER THE YEARS, AIRPORTS HAVE EVOLVED FROM
BEING GOVERNMENT OWNED AND OPERATED INTO SOPHISTICATED AND BUSINESS
ORIENTED SERVICE PROVIDERS.
MALAYSIA HAS AN ACTIVE INVESTMENT POLICY FOR AIRPORT INFRASTRUCTURE. THE
MALAYSIAN GOVERNMENT HAD RECOGNISED AVIATION AS A KEY SECTOR OF BUSINESS
AND COMMERCE AND ITS CRITICAL IMPORTANCE TO NATIONAL DEVELOPMENT. WE ARE
AWARE THAT AIRPORTS NEED TO MAKE LONG TERM PLANNING DECISIONS. THIS POLICY
HAD TAKEN INTO CONSIDERATION THAT CIVIL AVIATION WILL BE PRONE TO UPS AND
DOWNS AND THAT WE MUST BE READY TO ACCOMMODATE DEMAND WHEN THE
ECONOMY RECOVERED.
MALAYSIA HAD INVESTED SUBSTANTIALLY IN AIRPORT INFRASTRUCTURE AND WE REMAIN
COMMITTED TO ENHANCING AIRPORT CAPACITY. WE HAVE IN MALAYSIA, A WELL
DEVELOPED AND EXTENSIVE AIRPORT NETWORK. AIRPORT INFRASTRUCTURE IN MALAYSIA
HAVE BEEN SUPPLY DRIVEN, THAT IS WE PROVIDED CAPACITY AHEAD OF DEMAND. WE
EMBRACED THAT AIRPORTS WERE BUSINESS ORIENTED SERVICE PROVIDERS AND
PRIVATISED OUR AIRPORTS IN 1991. DUE TO THIS GOVERNMENT POLICY AND INVESTMENT,
MALAYSIA’S SIX INTERNATIONAL AIRPORTS AND 17 DOMESTIC AIRPORTS CONTRIBUTE
MUCH TO ECONOMIC DEVELOPMENT AS WELL AS RAPID AND SIGNIFICANT GROWTH IN
PASSENGER VOLUME AND CARGO HANDLED AT AIRPORTS.
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MALAYSIA’S MAIN GATEWAY, THE KUALA LUMPUR INTERNATIONAL AIRPORT OR KLIA, IS
TESTIMONY OF THE ACTIVE INVESTMENT POLICY AND SUPPLY DRIVEN AIRPORT
INFRASTRUCTURE CAPACITY. BUILT AT A COST OF US$ 3.5 BILLION, KLIA BEGAN
OPERATIONS IN 1998. IT IS ONE OF THE LARGEST AIRPORT SITES IN THE WORLD. IT IS AN
AIRPORT FOR THE FUTURE. ULTIMATELY THE AIRPORT WILL BE ABLE TO HANDLE 100
MILLION PASSENGERS PER ANNUM ONCE ALL PHASES ARE COMPLETED.
LADIES AND GENTLEMEN
LOW COST CARRIERS HAVE PERFORMED WELL EVEN IN THIS CHALLENGING AND
UNPREDICTABLE TIMES. IN MANY CASES THEY HAVE PERFORMED BETTER THAN LEGACY
CARRIERS. MUCH OF THE RECENT GROWTH IN PASSENGER TRAFFIC REFLECTS THE
EMERGENCE OF LOW COST CARRIERS. PASSENGER MOVEMENTS AT THE LOW COST
CARRIER TERMINAL AT KLIA INCREASED FROM 4.7 MILLION IN 2006 TO 10.1 MILLION IN
2008.
MALAYSIA, IN RECOGNISING THE BUSINESS MODEL PIONEERED BY LOW COST OPERATORS
BUILT ASIA PACIFIC’S FIRST LOW COST CARRIER TERMINAL AT KLIA IN MARCH 2006 TO
CATER FOR LOW COST OPERATIONS IN THE REGION. SUPPORTING PHYSICAL
INFRASTRUCTURE HAS ALSO BEEN PROVIDED OR PLANNED AT OTHER AIRPORTS SUCH AS
KOTA KINABLU, KUCHING AND JOHOR BHARU FOR LOW COST OPERATIONS. THE MALAYSIA
GOVERNMENT IS CONTINUOUSLY REVIEWING PLANS TO SUPPORT LOW COST CARRIER
OPERATIONS. RECOGNISING THE RISING DEMAND FOR BUDGET TRAVEL AND LIMITED
CAPACITY IN THE CURRENT LOW COST CARRIER TERMINAL AT KLIA, MALAYSIA AIRPORTS
WILL BUILD AND OPERATE A NEW LOW COST CARRIER TERMINAL. WORK HAS ALREADY
STARTED FOR THE NEW DEDICATED LOW COST TERMINAL AND THE TERMINAL IS EXPECTED
TO BE OPERATIONAL IN 2011. WHEN COMPLETED, THE TERMINAL WILL BE ABLE TO
ACCOMMODATE 30 MILLION PASSENGERS FROM THE CURRENT 15 MILLION PASSENGERS
PER ANNUM. THE COST OF THE LOW COST CARRIER TERMINAL IS ESTIMATED AT RM 2
BILLION.
MALAYSIA’S ACTIVE INVESTMENT POLICY, SUPPLY DRIVEN AIRPORT INFRASTRUCTURE
CAPACITY AND RECOGNITION OF THE LOW COST CARRIER MODEL HAVE FACILITATED
TRADE, EXPANDED AIRLINE OPERATIONS AND SUSTAINED THE INDUSTRY EVEN IN
TURBULENT TIMES. THESE MEASURES ALSO BROUGHT ABOUT TANGIBLE BENEFITS TO THE
COUNTRY IN TRAVEL AND TOURISM AND CONTRIBUTED MUCH TO THE RAPID AND
SIGNIFICANT GROWTH IN MALAYSIA’S PASSENGER VOLUME AND CARGO HANDLED AT
AIRPORTS.
LADIES AND GENTLEMEN
AIRLINES AND AIRPORTS ARE LINKED DIRECTLY AND RELY ON ONE ANOTHER. A PROFITABLE
AIRLINE INDUSTRY IS CRITICAL TO ANY AIRPORT’S PROSPERITY. THE MALAYSIAN
GOVERNMENT HAS ALWAYS SUPPORTED THE GROWTH AND COMPETITIVENESS OF THE
LEGACY CARRIER, MALAYSIA AIRLINES AND AIR ASIA THE LOW COST CARRIER. WE HAVE
LIBERAL AVIATION POLICIES TO ATTRACT FOREIGN CARRIERS TO OPERATE TO MALAYSIA.
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THESE LIBERAL POLICIES WAS COMPLEMENTED WITH SUFFICIENT INFRASTRUCTURE
CAPACITY. EFFECTIVE APRIL 2009, THE GOVERNMENT GRANTED A 50% REBATE ON
LANDING CHARGES FOR A PERIOD OF TWO YEARS TO ALL AIRLINES OPERATING IN
MALAYSIA. WE REMAIN COMMITTED TO ENSURING THAT MALAYSIAN AIRPORT OPERATORS
ARE ABLE TO PLAN AND EXPAND THEIR AIRPORT MANAGEMENT AND OPERATIONS
BUSINESS. I AM CONFIDENT THAT OUR COMMITMENT, POLICIES AND INCENTIVES WILL
CREATE NEW GROWTH AND ASSIST AIRPORT OPERATORS AS WELL AS AIRLINES IN COPING
WITH THE CURRENT ECONOMIC DOWNTURN.
LADIES AND GENTLEMEN
THE AIRPORT INDUSTRY IS FACING SIGNIFICANT CHALLENGES AS WE EMBARK ON A NEW
CENTURY OF AIR TRAVEL. ON THE ONE HAND, AIRPORTS NEED TO ACCOMMODATE RAPIDLY
GROWING TRAFFIC AND THE INTRODUCTION OF NEW LARGE AIRCRAFT. ON THE OTHER
HAND, AIRPORTS NEED TO ENSURE ACCEPTABLE LEVELS OF SAFETY. ACCIDENTS AND
INCIDENTS CONTINUE TO OCCUR AT AIRPORTS FROM TIME TO TIME. THE PRINCIPAL
CHALLENGE FOR AIRPORT OPERATORS, THEREFORE, WILL BE TO PROVIDE SUFFICIENT
CAPACITY AND EFFICIENCY WITHOUT ADVERSELY AFFECTING SAFETY.
THE DEPARTMENT OF CIVIL AVIATION, MALAYSIA HAS THE ROLE TO ENSURE THAT SAFETY
REMAINS THE PRIORITY AT AIRPORTS. WE ENSURE THAT THE PROVISION OF AERODROME
FACILITIES AND SERVICES ARE IN ACCORDANCE WITH THE STANDARDS AND
RECOMMENDED PRACTICES DEVELOPED BY ICAO. THE REQUIREMENTS OF THE ICAO ANNEX
14 HAVE BEEN IMPLEMENTED AS MANDATORY REQUIREMENTS FOR AIRPORTS. IN
ADDITION, AIRPORTS IN MALAYSIA ARE CERTIFIED AND CERTIFIED AIRPORTS IMPLEMENT
SAFETY MANAGEMENT SYSTEMS OR SMS. AERODROME CERTIFICATION HAS PROVEN TO BE
AN EFFECTIVE REGULATORY TOOL TO ENSURE AIRPORT SAFETY. THE DEPARTMENT HAS
ALSO DEVELOPED GUIDANCE THROUGH AIRPORT STANDARDS DIRECTIVES TO ASSIST
AIRPORTS TO ACHIEVE CERTIFICATION STANDARDS AND IMPLEMENT SMS.
AIRPORTS INTENDED FOR USE BY PUBLIC TRANSPORT OPERATORS, NEED TO BE CERTIFIED.
THE DEPARTMENT MUST BE SATISFIED, THAT THE AIRPORT CONFORM WITH ICAO ANNEX
14 AND AIRPORT STANDARDS DIRECTIVES, AND THAT THE AIRPORTS WILL OFFER A SAFE
ENVIRONMENT FOR THE OPERATION OF THE AIRCRAFT THAT IT IS INTENDED FOR. BEFORE
GRANTING AN AERODROME CERTIFICATE, WE ENSURE THAT THE AIRPORT OPERATOR HAS
THE NECESSARY COMPETENCE AND EXPERIENCE TO OPERATE AND MAINTAIN THE AIRPORT.
TO DATE ALL THE SIX INTERNATIONAL AIRPORTS AND TWELVE DOMESTIC AIRPORTS HAVE
OBTAINED AERODROME CERTIFICATION.
THE DEPARTMENT OF CIVIL AVIATION HAS ALSO ENFORCED THE MANDATORY
REQUIREMENT FOR SMS AT CERTIFIED AERODROMES. AIRPORT OPERATORS ARE REQUIRED
TO ESTABLISH, MAINTAIN AND ADHERE TO A SAFETY MANAGEMENT SYSTEM THAT IS
COMPATIBLE TO THE SIZE, NATURE AND COMPLEXITY OF THE OPERATIONS AUTHORIZED TO
BE CONDUCTED UNDER ITS AERODROME OPERATING LICENSE AND AERODROME
CERTIFICATE. THE SAFETY MANAGEMENT SYSTEM IDENTIFIES SAFETY HAZARDS, ENSURES
REMEDIAL ACTION NECESSARY TO MAINTAIN AN ACCEPTABLE LEVEL OF SAFETY, PROVIDES
FOR CONTINUOUS MONITORING AND REGULAR ASSESSMENT OF THE SAFETY LEVELS
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ACHIEVED AND AIMS TO MAKE CONTINUOUS IMPROVEMENT TO THE OVERALL LEVEL OF
SAFETY. SINCE THE IMPLEMENTATION OF SMS EARLY THIS YEAR, FIVE INTERNATIONAL
AIRPORTS HAVE OBTAINED SMS CERTIFICATION.
LADIES AND GENTLEMEN
IN THESE CHALLENGING TIMES AND TOUGH BUSINESS ENVIRONMENT, IT IS IMPORTANT
THAT AIRPORT OPERATORS, AIRLINES, SERVICE PROVIDERS AND REGULATORS WORK
TOGETHER TO ENSURE THE SPEEDY RECOVERY OF THE INDUSTRY AND THE LONG TERM
SUSTAINABILITY OF AVIATION. IT IS ALSO IMPORTANT THAT THOSE IN THE BUSINESS OF
RENDERING ASSISTANCE IN THE DEVELOPMENT OF THE INDUSTRY PLAY A LEADING ROLE IN
FINDING SOLUTIONS TO THE CHALLENGES AND NEW REALITIES FACING CIVIL AVIATION. IT
IS ALSO IMPORTANT THAT STAKEHOLDERS WITH RESOURCES ASSIST AS SUBSTANTIAL
CAPITAL IS NEEDED IN AIRPORT DEVELOPMENT.
THERE IS A NEED NOW FOR NEW LEVELS OF COOPERATION, NEW WAYS OF DOING
BUSINESS, NEW EMPHASIS, NEW IDEAS, BEST PRACTICES, EFFECTIVE DECISION MAKING
AND BUSINESS EXCELLENCE. THE CURRENT DOWN TURN IS ALSO AN OPPORTUNITY AS IT
ALLOWS US TO PLAN FOR CAPACITY. IT IS IMPORTANT, THAT IN THESE CHALLENGING TIMES
AND TOUGH BUSINESS ENVIRONMENT THAT AIRPORT OPERATORS SHOW RESILIENCE AND
BUSINESS EXCELLENCE.
LADIES AND GENTLEMEN
MALAYSIA IS FULLY COMMITTED TO ENHANCING SAFETY, SECURITY AND EFFICIENCY FOR
AVIATION. THE DEPARTMENT OF CIVIL AVIATION IS THE REGULATOR FOR CIVIL AVIATION IN
MALAYSIA. WE HAVE IN PLACE THE NECESSARY OVERSIGHT STRUCTURE WHICH INCLUDES
OVERSIGHT OF AIRPORTS. CONTINUOUS EFFORTS, BY BOTH THE REGULATORS AND
AIRPORT OPERATORS TO CONFORM TO ICAO STANDARDS AND RECOMMENDED PRACTICES
IS ABSOLUTELY CRITICAL FOR SAFE AND EFFICIENT OPERATIONS AT AIRPORTS.
ON OUR PART, WE PLEDGE OUR FULLEST COOPERATION WITHOUT COMPROMISING SAFETY
AND SECURITY. IN DISCHARGING OUR RESPONSIBILITIES, WE PROMISE A PRAGMATIC
APPROACH IN COMPLIANCE, TO REDUCE COST, IMPROVE EFFICIENCY AND FACILITATE
DELIVERY OF SERVICES. WE HAD FACED CHALLENGES BEFORE AND RECOVERED. I AM
CONFIDENT THAT THE AVIATION INDUSTRY WILL RECOVER, TRANSFORM AND EMERGE
MUCH STRONGER IN THE LONG TERM.
THANK YOU.
G 10 2/11 /09
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