Malaysia's second budget airline terminal at Kota Kinbalu in Sabah is to open on Jan 1.

The terminal, built in seven months at a cost of RM60 million, is aimed at boosting arrivals to Sabah and Sarawak states and will be launched in time for Malaysia's 2007 tourism campaign.

It can handle 2.5 million passengers annually, five times more than the old terminal it is replacing, The Star newspaper said.

"The new terminal is a New Year gift to Sabah and will open in time for Visit Malaysia Year 2007. This terminal will also be able to cater to AirAsia's growth," Malaysia Airports Operations Services senior general manager Azmi Murad told The Star .

The country's first low-cost carrier terminal (LCCT) was opened in March 2005 in the capital Kuala Lumpur and is currently used solely by budget airline Air Asia.

Low-cost airlines

Meanwhile, it has been reported that Malaysia was considering allowing more low-cost airlines to fly into the country, including Singapore's Tiger Airways and Thailand's Bangkok Air.

The New Straits Times quoted Tourism Minister Adnan Mansor as saying the government was in talks with Tiger Airways to give it access to tourist destinations on the Malaysian east coast and on Borneo island.

But he said it was unlikely to be allowed to fly the lucrative Kuala Lumpur-Singapore route which is only serviced by the two respective national carriers - Singapore Airlines and Malaysia Airlines.

Malaysia-based budget carrier AirAsia has been campaigning for access to the route and said recently it hopes to have approval early in the new year.

"We are persuading the Transport Ministry to let Tiger Airways fly to some destinations in Malaysia that are lucrative," Adnan told the New Straits Times .

"They are still negotiating. We are also talking to Bangkok Air because they want to come to Malaysia."

The minister said the initiative was aimed at boosting arrivals during Visit Malaysia Year 2007.

Adnan said that Cebu Pacific has recently launched flights from Manila to Kuala Lumpur and another Philippines-based carrier is likely to start operating soon from Davao to Sandakan in Malaysian Borneo.

Thai AirAsia will also launch flights from Bangkok to the Malaysian resort island of Langkawi on Jan 6, he added.