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AirAsia demands US$107 million in damages from KL Airport operator

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AirAsia Bhd, Southeast Asia's largest budget carrier by market value, is asking the Kuala Lumpur airport operator for RM409 million to cover losses and damages the airline says it suffered using the new and old budget terminals.

[KUALA LUMPUR] AirAsia Bhd, Southeast Asia's largest budget carrier by market value, is asking the Kuala Lumpur airport operator for RM409 million to cover losses and damages the airline says it suffered using the new and old budget terminals.

AirAsia sent a letter on Friday demanding payment from Malaysia Airports Holdings Bhd and a subsidiary, claiming they breached their duties at the airport. The letter claims problems at the new klia2 terminal have hurt the airline's reputation, "as the public perception is that the failings of the facilities are within the control of AirAsia" as klia2's largest user.

The RM4 billion terminal, which opened in May 2014, is sinking, causing cracks in the taxiways and pools of water that planes must drive through, Bloomberg News has reported. AirAsia says the defects could cause flight delays, increase wear and tear on planes and pose safety risks.

Malaysia Airports says the depressions and ponding are caused by soil settling unevenly in the apron and taxiway, where some of the structure is built on piling and some stands on normal ground. The operator has patched and resurfaced problem areas and is building a concrete slab that it says will serve as a more permanent solution by next April.

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A spokeswoman for Malaysia Airports said Friday afternoon the company couldn't immediately comment on AirAsia's letter.

BLOOMBERG

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