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The Malaysian Government will hold the authority to restructure the airport industry. Credit: Samuel T on Unsplash.

Malaysia Airports Holdings Berhad (MAHB) has secured an in-principle approval from the Malaysian government for the management, development, operations and maintenance of 39 airports and short take-off and landing airports (STOLports) until 2069.

A cabinet decision was made by the government on the material terms of the operating agreements (OA 2023).

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According to the OA 2023, MAHB and the Malaysian Government will have flexibility regarding the method to finance expenses tied to airport development with government allocations through development expenditure or MAHB via any ideal investment recovery model mechanism.

An airport development fund (ADF) will be created, which will secure contributions from airport users, the public, and airlines, in addition to 50% of the passenger service charge considered in the user fee calculation will be moved to the ADF trust account.

In addition, the Malaysian Government will hold the authority to restructure the airport sector via clustering, carving out, or divestment of airports.

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It will also have the right to shutter existing airports or terminals or restructure the ownership of any of the facilities upon mutual agreement with MAHB.

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Malaysia Airports managing director Iskandar Mizal Mahmood said: “The new OA 2023 is a reflection of the government’s confidence in Malaysia Airports’ capabilities and deep experience in managing and operating airports locally and internationally.

“It will ensure commercial sustainability and facilitate growth for the nation’s airports, which, in turn, will serve as an important economic development lever for Malaysia.

“We will be able to continue operating underserved essential community airports and STOLports, and at the same time enhance airport capacity where needed and provide better airport service levels as a whole.”