CHAPTER 1:
INTRODUCTION
1.1 Research Background
The competition between Low Cost Carriers (LCCs) and Full Service Carrier is getting intense caused by the process of liberalization in aviation field. In the case of Malaysia, the entries of LCCs, Air Asia, Firefly and Malindo have raised the number of passengers travelling inbound or outboard of the destination. According to Malaysia Airports Holding Berhad (MAHB) Annual Report 2009, the passenger movement of AirAsia for domestic traffic at KLIA increases to 5,588,493 passengers which is an increment of 10.6 percent compare to 2008. For the aviation sector, there is a significant growth of 16.6 percent, from 24.2 million passengers in 2009 to 28.2 million passengers in 2010.

No doubts, airlines and airport are tightly related. This can be shown from the statement of Neufville & Odoni (2003), airport systems exist and must be designed in the context of their major clients, the airlines. To build airport facilities that will perform effectively, it is necessary both to appreciate the historical context and to understand the current and prospective needs of the users.

Airports and air transport at the start of the twenty-first century constitute an exciting long-term growth industry. The industry is large, innovative, and has excellent prospects. The growth in air transport translates into major airport projects. And about a dozen major programs for airport development, costing over a billion dollars each, have typically been under way at any time in the last decades. The clear example we can seem from the establishment of Kuala Lumpur International Airport 2 at year 2010 by Malaysia’s federal government (Jiang, 2007).

The growth of the Low Cost Carriers (LCCs) in the world will have a significant impact on future airport development. LCCs such as Air Asia prefer only basic terminal facilities at