KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) has insisted on recovering the loss of an average about RM7 million monthly through ‘proper’ means, resulting from AirAsia Group Bhd (AirAsia) move to charge a lower Passenger Service Charge (PSC) amount than the gazetted rate.
The airport operator said the disparity of approach to PSC and AirAsia’s action distorted competition and impacted MAHB’s ability to attract new airlines into the country, hampering its efforts to establish Malaysia as a strong aviation hub.
“Although AirAsia has announced their claims publicly, we have not received any particulars on the claims from AirAsia and the jurisdiction is still unclear at this point of time”, MAHB group chief executive officer Raja Azmi Raja Nazuddin told NST Business today.
The low-cost carrier AirAsia and its long-haul unit, AirAsia X Bhd (AAX) had defended their refusal to collect the additional RM23 PSC at klia2 imposed by MAHB from February 2018.
AAB chief executive officer Riad Asmat said the move was due to its view that passengers using klia2 should not be charged the same rates as passengers at the Kuala Lumpur International Airport (KLIA).
AIrAsia Group maintained that KLIA Terminal 2 (klia2) is a low-cost terminal with far lower levels of service provided to passengers compared to KLIA, which is a full-service terminal.
In return, MAHB’s subsidiary, Malaysia Airports (Sepang) Sdn Bhd (MASSB) had in December last year claimed RM36.1 million in arrears for uncollected PSCs from AAX and AirAsia Bhd (AAB).
“We are optimistic that these matters can and will be resolved - the first of which would be the matter of jurisdiction in resolving such matters.
“The jurisdiction on contractual matters rests solely with the courts and this is being dealt with in court at present,” MAHB said in a statement today.
MAHB said PSC rates are not set, fixed or controlled by the airport operator but rather under the purview of the Malaysian Aviation Commission (MAVCOM) - an independent economic regulator to the civil aviation industry.
PSC is stated under Section 46 of the Malaysian Aviation Commission Act 2015.
“PSC is charged on departing passengers at all airports in Malaysia except at the Short Take Off Landing ports (STOLports), which are located in remote areas,” MAHB added.
MAHB said PSC is used to partially cover the numerous operating and capital expenditures for the improvement and maintenance of airport facilities and services.
“It is common practice in the aviation industry for PSC to be collected by the airlines from the departing passengers upon purchase of their flight tickets and thereafter, the PSC is paid to the airport operator following completion of the flight,” it said.
MAHB said Malaysia’s PSC rates for both domestic and international departures remain amongst the lowest regionally and globally, while noting that some airports such as Sydney and Melbourne, Australia that charge both departing and arriving passengers.
“In November 2017, MAVCOM had announced the final step for the full equalisation of PSC across all airports in Malaysia which was to take effect on January 1, 2018.
“This last step was to equalise the PSC for non-Asean international flights at klia2 to be the same with those at KLIA and other airports in Malaysia from RM50 to RM73,” it said.
MAVCOM said the PSC equalisation would facilitate fairer environment competition between airlines operating in Malaysia, while allowing Malaysia to be better aligned to international guidelines, including with the International Civil Aviation Organisation (ICAO) principle of non-discriminatory pricing at airports.
The equalisation also facilitated the need to lower the subsidies at klia2.
MAHB said currently all other airlines operating at klia2 such as India’s largest low cost carrier IndiGo collects and pays the PSC rate of RM73 for Non-Asean international passengers.
“The last step in the equalisation had only affected fewer than 4.5 million passengers travelling to Non-Asean international destinations, 70 per cent of which are foreign nationals,” MAHB said , adding that it had implemented the PSC revision as per the gazetted amount by MAVCOM.
Airports globally charge the same PSC rates for all its terminals regardless of operating airlines. For example, both Suvarnabhumi International Airport (Bangkok) and Don Mueang International Airport (Bangkok) charge the same rate despite the clear distinction between full service and low-cost operations respectively at the two airports.
The equalised PSC for Don Mueang and Suvarnabhumi airports is BHT 700 or RM80, for all international passengers (Asean and non-Asean).
PSC rate for Asean was revised down from RM65 to RM35 in 2017 for all international departing passengers to Asean countries at all airports in Malaysia.
MAHB said Asean international passengers at klia2 had benefited from the lower RM35 PSC charges, make up 57 per cent of the total international passengers at klia2.
MAHB operates 39 airports nationwide, of which 18 are STOLports such as in Bario, Bakelalan, Marudi, Long Akah, and Mukah to name a few.
At these airports, PSC is waived for about 160,000 passengers who use the STOLports annually as part of MAHB’s corporate social responsibility in providing connectivity and accessibility to basic needs such as education, healthcare and economic opportunities for the rakyat at remote areas.
On Conditions of Use 2017 (COU 2017) contract between MASSB and all airlines operating from KLIA and klia2, PSC rates payable are subject to any revised MAVCOM regulations.
It is also stated in the COU 2017 that MASSB may close part of the airport or suspend, interrupt or shutdown airport services and facilities if any repair, maintenance or upgrade of the facilities is needed provided reasonable prior notices.
“In the event of such a situation, we will not be liable for any loss or damages. The COU 2017 also specifies that any dispute between the parties are to be handled at the exclusive jurisdiction of the courts,” MAHB said.
AirAsia Group recently had claimed RM480 million from MASSB for losses incurred from operating at klia2, following the loss of customers in the last four years, owing to disruptions and poor condition of the terminal.