KUALA LUMPUR (June 4): The opening of the Kuala Lumpur International Airport2 (KLIA2) could be delayed by more than six months, says Alliance Research Sdn Bhd.
"Even though the terminal building is expected to be completed within two months, we believe the delay in the opening of KLIA2 could be more than six months.
"This is due to additional time required post completion of the terminal for example three months rigorous test run and review of operational readiness and six months of preparation time for AirAsia to move into the new terminal.
"As such we believe KLIA2 may only commence its operations by the end of first quarter 2014," said Alliance Research in a research note.
MALAYSIA AIRPORT HOLDINGS BHD [] (MAHB) had said earlier that it was seeking the approval of the government to extend the tenure of its concession from 25 years to 60 years.
"Without any change to the remaining tenure of the existing concession agreement, MAHB's financial year 2014 earnings would be significantly affected by higher depreciation and amortisation charges upon the completion of KLIA2," it said.
However, the extension would allow MAHB to amortise the cost of KLIA2 over a longer period, thereby boosting near-term reported earnings.
"Assuming an extension of up to another 60 years, our back-of-the envelope calculation suggests that MAHB's financial year 2014 earnings could increase by about 28 per cent," it said.
Against this backdrop, Alliance reiterated its "neutral" rating on MAHB with an unchanged target price of RM5.90.
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