Penang has asked the federal government to create an international air connectivity fund under Budget 2027, with matching grants aimed at drawing direct flights from Japan, South Korea, Australia and the Middle East. It is one of three tourism priorities the state put forward ahead of the spending plan, alongside a larger pool for major international events and a dedicated heritage fund.
State Tourism and Creative Economy Committee chairman Wong Hon Wai said the fund is the state’s main aviation priority, arriving as the Penang International Airport upgrade lifts capacity to 12 million passengers a year. “With the Penang International Airport (LTAPP) upgrading project set to double its capacity to 12 million passengers a year, the priority now is to ensure that the capacity can be fully utilised through new routes and increased flight frequencies,” he told Bernama.
The expansion and upgrading work is scheduled for completion in June 2028. Wong framed the request around a simple gap: a bigger terminal only pays off if airlines add routes and frequencies to fill it. He said the state’s tourism focus after Visit Malaysia 2026 should move from counting arrivals to raising the value each visitor spends.
Business events generated about RM1.91 billion in economic impact last year, Malay Mail noted, and Penang is seeking a larger federal matching pool to bid for international conferences, exhibitions, sporting events, festivals, concerts and large-scale arts programmes. The same fund could also finance creative content, local productions and intellectual property taken to international audiences.
A third request would create a UNESCO George Town Conservation and Regeneration Fund, covering heritage building conservation, public space upgrades, safety, accessibility and the traditional trades that keep the inner city alive. “We do not want to merely preserve buildings. We need to ensure that the heritage, culture and local communities continue to thrive while being able to generate new economic activities through tourism and the creative economy,” he said.
The mechanism is not new to federal budgets. In Budget 2026, FMT reported, the government set aside RM50 million in matching grants to encourage international and charter flights to Malaysia.
Wong also asked for the formula that channels 100 per cent of tourism tax to the states to continue into 2027, since Visit Malaysia has been extended to that year. “As Visit Malaysia has been extended to 2027, it is hoped that the 100 per cent allocation of tourism tax can also be continued next year,” he said. Budget 2027 is scheduled to be tabled in Parliament on 9 October by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.
