MAHB: The Turning Point No One Saw Coming

By Saleh Mohammed,

When Malaysia Airports Holdings Bhd (MAHB) was privatised earlier this year, the deal was presented as a watershed moment, a strategic pivot meant to supercharge growth, unlock capacity, and turn our airports into regional champions.

The government’s sales pitch was simple: privatisation would allow MAHB to respond faster to industry demands, attract more airlines, and roll out infrastructure upgrades at pace. The payoff? Better passenger experiences, increased connectivity, and a boost to the national economy.

But behind the headlines, the numbers, negotiations, and timing of the deal tell a far more complex story, one that raises as many questions as it answers.

The Price Question – Not Fair, But “Reasonable”?

Valuation was the first major red flag. The independent adviser told shareholders the RM11.00 offer price was “not fair, but reasonable”. That alone is an eyebrow-raiser in corporate Malaysia.

Independent directors pushed for rejection after getting a higher independent valuation. An industry source, using a discounted cash flow model, came up with a range between RM14 and RM24, and that’s without factoring in property development and non-passenger revenue.

Gateway Development Alliance Sdn Bhd (GDA), the consortium behind the buyout, used an asset-based valuation. Yet, somehow, over 95% of shareholders, including heavyweight institutional investors, accepted the offer without much resistance.

Growth Without GDA

Ironically, many of the government’s stated goals for privatisation had already been achieved before GDA’s involvement.

By 2024, MAHB was operating connections to 138 international destinations, had secured 12 new airlines, 16 resumptions, and 24 new destinations. Passenger traffic rose 14.3%, and non-aeronautical revenues outpaced aeronautical.

The Sweetheart Deals

In late 2022, MAHB inked a 99-year lease for KLIA Aeropolis under a Development Agreement with the government, a move that unlocked off-terminal aviation and commercial projects. These were paired with new Operating and Lease Agreements that industry watchers called “sweet deals,” providing long-term stability and fresh revenue channels.

By February 2025, MAHB’s trailing twelve-month financial ratios were already beating industry benchmarks. Which begs the question, why the rush to privatise?

Due Diligence – Or Lack Thereof

MAVCOM, the aviation regulator, requested that GDA substantiate its claimed economic efficiencies and social benefits. This meant providing a clear business case, timelines, and supporting evidence.

GDA’s response? That such efficiencies were “not immediately relevant” to MAVCOM’s decision-making. The submission lacked definitive actions, timelines, and quantitative estimates.

This is startling when you consider that two of GDA’s largest members are custodians of more than RM1 trillion in public and sovereign wealth. Accepting this level of due diligence, or lack thereof is difficult to reconcile.

The MAVCOM Mystery

Adding to the intrigue, the MAVCOM Dissolution Bill was approved in June 2024 while the privatisation process was still in motion. MAVCOM, unlike the Civil Aviation Authority of Malaysia (CAAM) or the Ministry of Transport, is an independent statutory body, funded outside the federal budget, with a clear mandate to safeguard competition and consumer rights.

Why dismantle an independent regulator in the middle of one of the most significant aviation transactions in recent history?

Lingering Operational Headaches

Not all of MAHB’s issues are strategic. The KLIA Aerotrain, replaced at a cost of RM456 million, reportedly suffered at least five disruptions within a month of resuming service in July. The baggage handling system remains a source of passenger frustration.

Meanwhile, Firefly and AirAsia have both pulled their jet operations from Sultan Abdul Aziz Shah Airport (LTSAAS) after barely 12 months, despite MAHB spending RM22 million on upgrades.

Post-privatisation, MAHB has shifted from aggressive brick-and-mortar expansion to refurbishing older assets, a strategy at odds with the government’s original rationale for the takeover.

PAC Steps In – But To What End?

The Public Accounts Committee (PAC) is now investigating the privatisation. That should inspire confidence, except some members have already said they see no governance issues, even as witnesses and former directors are recalled for further questioning.

Confidentiality is another concern. Under Standing Order 85 of the Dewan Rakyat, PAC proceedings are not to be disclosed to the media. A “Chinese wall” is essential if the process is to be credible.

The Stakes for Malaysia

The Ministry of Transport and Ministry of Finance, as key stakeholders must ensure that MAHB’s post-privatisation strategy aligns with national priorities.

The new shareholders, too, carry a responsibility: to honour their promises not just to investors, but to employees, passengers, and the Malaysian aviation sector as a whole.

This wasn’t a fire-sale. But unless firestops are put in place, the sparks from this deal could still ignite a much larger blaze.

What say you?