Oleh/By : DATO' SERI DR.
MAHATHIR BIN MOHAMAD
Tempat/Venue : THE PALACE OF THE GOLDEN HORSES
Tarikh/Date : 17/02/2000
Tajuk/Title : THE OPENING OF AIR FREIGHT ASIA
2000 CONFERENCE
First of all, I wish to extend a warm welcome and
"Selamat Datang" to Kuala Lumpur to all of you
gathered here today at the Air Freight Asia 2000
Conference. I am pleased and honoured to be here for
such an auspicious occasion and in the company of
distinguished guests and delegates. I hope each and
everyone of you here will not only benefit from this
conference, which is being held in Kuala Lumpur for the
first time, but also enjoy your stay in this
multiracial, multicultural country, Malaysia. I am
sure you will find Malaysians of whatever origins
hospitable.
2. Let me take this opportunity to congratulate the
organisers of the Air Freight Asia 2000 conference for
its initiative, which is timely considering the
economic recovery in Asia, and in Malaysia, in
particular. The pace of the recovery is expected to
accelerate further as the world economy expands with
stronger demand from the industrialised as well as the
developing countries. In line with this economic
expansion, the aviation industry, which had reported
lower growth following the economic recession in the
past two years, is I believed, poised to resume their
upward growth. This is evident from the latest
statistics of the Association of Asia Pacific
Airlines, which reported a nine per cent increase in
passenger and cargo for the first half of 1999. With
the higher economic and travel growth forecast for this
region this year and the years to come, Asia Pacific
airlines are expected to improve very significantly
their performance.
3. The growth and development of the aviation
industry is critical to global trade. With
globalisation, world markets are becoming more
interdependent and competitive. Increasingly, companies
are outsourcing their needs to achieve the lowest cost
and highest quality to remain viable. This has led to
a surge in demand for air freight and the growth of
global logistic business. In anticipation of the huge
demand for air freight and logistics business, the
Government of Malaysia initiated the upgrading and
expansion of the air transport infrastructure.
4. Our single biggest infrastructure investment was
the building of the Kuala Lumpur International Airport
(KLIA) in Sepang. Operational since June 1998, the
RM10 billion state-of-the-art KLIA is the first step
towards realising our goal of making Malaysia an
important hub for the region. The private sector had
also contributed towards making KLIA a state-of-the-art
airport by investing billions of ringgit in their
facilities. Malaysia Airlines, for example, invested
RM640 million for its cargo operations, which included
the Advanced Cargo Centre to support the expansion in
the nation's trade and cargo business.
5. These facilities alone will not be sufficient for
Malaysia to take advantage of the tremendous growth
expected of the cargo industry in the 21st century.
This is why the Government reviews its policies on a
regular basis to ensure all the key elements, which are
required to provide the right business environment for
the transfer of goods in and out of the country, are
put in place. As far as air freight is concerned,
Malaysia practises a liberal aviation policy and is
prepared to enter into "Open Sky" arrangements with any
country which will encourage and facilitate airlines,
forwarders, importers and exporters to use KLIA as the
leading cargo hub for the region. For this reason, the
Government has always ensured that tariffs at KLIA are
among the lowest in the region thanks to the low cost
of living and low inflation in the country. The
Ministry of Transport as the lead agency responsible
for the overall development of the transport
infrastructure is also sensitive to feedbacks from
members of the airlines, freight community and other
users. These feedbacks are necessary to ensure that the
freight and the logistics industry progress smoothly in
line with the country's continued advance as a major
trading nation.
6. The air freight industry is expected to undergo
tremendous changes as the pace of globalisation and
liberalisation accelerates in the next few years.
Businesses that anticipate and adapt to these changes
are expected to do well in the new environment. In
order to do business and to prosper in the 21st
century, freight forwarders and airlines will have to
radically change the way they conduct their businesses.
Gone are the days when freight forwarders and airlines
merely move cargo from point A to B; instead, a
comprehensive service package involving the warehousing
and inventory management of goods and door-to-door
delivery may be the norm rather than the exception.
7. I am told that as businesses grow, the ability of
airlines or freight forwarders to offer such services
may be limited. The alternative is for airlines and
freight forwarders to seek strategic partners in the
transport and logistic chains. This will pave the way
for mergers in the air freight industry which may
include non-traditional players. Given such a
situation, it is timely and relevant for the Malaysian
freight community to work together to consolidate their
resources and operations.
8. The Government believes that there are no losers
in such a consolidation exercise. Those who dare to
merge their businesses will only stand to profit from
their foresight while their customers will enjoy better
rates and services. The Government believes that such
mergers will boost our competitive edge in new markets
in the Asia Pacific and beyond. Currently, the
shipping and road haulage companies are consolidating
their resources and operations with the full support of
the Government. The local freight forwarders should not
only follow suit but also consider partnering with them
to become multi-modal companies or total logistics
providers linking surface, sea and air freight
business.
9. Another significant development that may impact
the industry is the mergers of cargo divisions of
airlines. Although this is a relatively new
development involving a very limited number of
airlines, the benefits of such tie-ups would eventually
encourage other airlines to enter into similar
arrangements.
10. In the near future, I would not be surprised to
see existing airline partners of the two leading global
alliances pooling their resources to compete more
effectively with companies like Federal Express, DHL
and United Parcel Service, which grew from courier
companies to become pioneers of integrated air freight
services. The air freight industry is likely to
witness even greater competition between the
traditional airlines and the integrators as they
transform into total logistics service providers.
11. I am pleased to note that our national carrier,
Malaysia Airlines, has embarked on an expansion
programme that will enable its cargo subsidiary
MASkargo to transform into a total logistics service
provider. This programme includes identification of
cargo hubs in major markets and to link them with KLIA
to form a new logistic network as well as forging
strategic partnerships with airlines, logistics service
providers and trucking companies. The formation of hubs
and the strategic partnerships would allow MASkargo to
achieve "the critical mass" needed to transform itself
into a total logistics service provider.
12. In addition, MASkargo has more than doubled its
freighter capacity by increasing its fleet from two to
five B747 freighters last November and has projected
its fleet size to triple to fourteen B747s by 2003/04
which will provide the much needed cargo capacity and
frequency at KLIA.
13. I am sure that your participation at this biennial
conference will enable you to assess first hand the
excellent facilities and services at KLIA. I
understand that as part of the programme you will be
offered a tour of the cargo facilities. Some of you,
I am told, had only heard of KLIA, but have yet to
visit our state-of-the-art airport. I sincerely hope
that you will be impressed with what you will see and
take this opportunity to become partners in the future
growth of KLIA as a major cargo hub.
14. I would like once again to thank all of you for
your attendance and participation at the Air Freight
Asia 2000 conference. I hope that you will have a
fruitful and productive discussion.
15. On that note, I have great pleasure to declare
open the Air Freight Asia 2000 conference.
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