A new budget airline terminal in Kota Kinbalu aimed at boosting tourism in Malaysian Borneo is expected to be completed by the end of the year, reports said today.

The country's first low-cost carrier terminal (LCCT) was opened in March in Kuala Lumpur, just days ahead of the launch of a rival facility in Singapore.

Kota Kinabalu's new terminal will be able to handle up to three million passengers annually, or six times the airport's current capacity.

It is part of a RM720 million (US$200 million) project which includes a new air traffic control tower and runway extension.

Completed in six months

"The terminal is needed urgently because of growing passenger and budget aircraft movements," Transport Minister Chan Kong Choy told the Star daily, adding that construction was expected to be finished in six months.

AirAsia chief executive Tony Fernandes said the region's leading budget carrier would make Kota Kinabalu a hub by July.

"Now we can look at flying to new regional destinations such as to southern China, Vietnam and Indonesia from this new hub. We are planning to start flying to Macau in August from Kota Kinabalu," he told the New Straits Times.