This article first appeared in The Edge Financial Daily, on May 24, 2016.

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) has formed five partnerships with several parties, including AirAsia Bhd and DRB-Hicom Bhd, to expand air cargo operations as well as aeronautical support; logistics; and maintenance, repair and overhaul (MRO) services locally.

This is part of the airport operator’s massive KLIA Aeropolis project, which aims to make Malaysia an aviation hub in Asean.

Yesterday, MAHB entered into three memoranda of understanding (MoU) and two partnership agreements for the development of KLIA Aeropolis.

Under the MoU with AirAsia, the low-cost carrier will develop a regional distribution centre at the cargo terminal for its low-cost express courier and parcel delivery services called Redbox. MAHB also entered into the MoU with DRB-Hicom for the latter’s wholly-owned unit KL Airport Services Sdn Bhd (KLAS), an aviation ground services provider, to develop 450,000 sq ft space in the former low-cost carrier terminal (LCCT) into a cargo terminal.

Raya Airways Sdn Bhd will also occupy 200,000 sq ft in the former LCCT for its cargo business. Raya Airways will partner DHL Express (M) Sdn Bhd and Dnata, an aircraft ground handling and cargo services provider, to undertake the project.

This confirms The Edge Financial Daily’s report dated May 16 that Raya Air, formerly Transmile Air Services Sdn Bhd, will soon break the duopoly and get a slice of market share in the provision of cargo terminal and ground-handling services at KLIA.

Currently, there are two major ground handlers, DRB-Hicom-owned KLAS, which is in the midst of selling KLAS to Pos Malaysia Bhd, and Malaysia Airlines Bhd Cargo.

MAHB has also formed a partnership agreement with Vanderlande Industries BV, a Netherlands-based material handling and logistics automation firm. The partnership is to explore the setting up of a regional distribution centre for the management and distribution of spare parts for baggage-handling systems in Malaysia. Vanderlande is involved in baggage-handling systems for airports, and sorting systems for parcel and postal services.

MAHB also entered into a tie-up with RUAG Aviation Malaysia Sdn Bhd, a Switzerland-based civil and military aviation supplier, support provider and integrator of systems and components. The partnership is to convert the former customs building at Sultan Abdul Aziz Shah Airport into an MRO facility.

At the launching ceremony of KLIA Aeropolis yesterday, the group’s managing director Datuk Badlisham Ghazali told reporters that MAHB looks forward to more investment proposals being submitted to the group after the commencement of the project.