KOTA KINABALU: Group Chief Executive Officer and Air Asia Bhd Director Tan Sri Tony Fernandes has urged the government to build a truly low cost airline hub in Kota Kinabalu, saying Sabah is strategically located in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

Th city's centre is also a destination for backpackers, who will contribute to the growth of the hotel and tourism sectors in future, he said in his talk at the Sabah International Business Luncheon here today. It was attended by Chief Minister Datuk Seri Musa Aman.

Commenting on the government's recent decision to get AirAsia to move its flight operations to Terminal 1 of the Kota Kinabalu International Airport (KKIA), Fernandes said: "If asked to move, I would be the last person to move the terminal because the airport tax will grow from RM3 to RM65.

"We don't pay but the passengers must pay."

It was previously reported that AirAsia had appealed to the Transport Minister to continue its operations at KKIA's Terminal 2 although it had given its commitment to move to Terminal 1 in mid-June last year.

Fernandes said the airline was hesitant about moving from Terminal 2 to Terminal 1 of KKIA because operational costs and airport tax would increase, which would burden the passengers.

Such a situation would lead to a reduction in the number of flights and ultimately cause a significant drop in the number of tourists to Sabah, he said.

"In Sabah we have carried about three million passengers from 2009 to this year, and with a new route in the pipeline, we expect the passenger load to increase to six million.

"AirAsia's annual growth for Sabah is 20 per cent per year," he said.

Fernandes, who started his airline business in 1993 and began operations in 1996, said his secret formula includes the three assets of low cost, brand and people.

"We started from zero with a special focus on the Asian market, but we need to think local first and regional next," he said.

He also announced that AirAsia will start flying from Kota Kinabalu to Cebu in the Philippines in December.

Meanwhile, Musa advised local entrepreneurs to take advantage of the economic growth to emulate Fernandes, whom he described as a successful businessman who is "intelligent, sincere and genuine".

-- BERNAMA