17 November 2017

Low-cost carrier (LCC) group AirAsia Bhd has called for the Malaysian Aviation Commission (Mavcom) to expedite its proposed revamp of how passenger service charges (PSCs) are calculated across Malaysian airports.

Group chief executive officer Tan Sri Tony Fernandes lauds the proposal and believes Malaysia would be the first country in Southeast Asia to implement such a system.

“It’s good, I applaud them for doing it and I urge them to do it quicker,” said Fernandes on the sidelines of AirAsia’s digital strategy presentation in Singapore yesterday, adding lightly that he thinks the recalculation could be done as soon as within six months’ time.

In August, Mavcom chief operating officer Azmir Zain told The Edge Malaysia that the commission seeks to revamp how PSC, more commonly known as airport tax, is calculated in Malaysian airports so that it better reflects available facilities and service levels at individual airports.

The shift mirrors international practices which typically peg airport tax calculations to the construction cost of an airport as a proxy to available facilities and services, he explains.

Mavcom is looking at three to four years, if not shorter, as a tentative timeline to finalise the mechanism for Malaysia as some European countries took a similar timeframe to roll out such systems.

“The logic here is if someone spends a certain amount to develop and maintain an airport, then the services should be of a certain level too,” Azmir then said in an exclusive interview. “That’s basically the methodology which we would like to base our charges on.”

While details are yet to be available, the revamp would likely lead to asymmetrical PSC levels at different airports. In a nutshell, PSCs at larger airports such as KLIA and klia2 may increase whereas smaller airports may see reductions.

At present, there are five international airports and 16 domestic airports out of airport operator Malaysia Airports Holdings Bhd (MAHB)‘s stable of 39 airports. The rest are short take-off and landing ports (STOLports) that provide connectivity to rural areas.

The only Malaysian airport not operated by MAHB is the Senai International Airport in Johor, which is run by MMC Corp Bhd’s unit Senai Airport Terminal Services Sdn Bhd.

The proposed calculation changes are being considered over a year since the latest PSC review in October 2016. The review, Mavcom’s first since its establishment in March 2016, increased PSCs for domestic departures at all airports to RM11.

PSCs for international departures increased to RM50 for klia2 and RM73 for all other airports, while a new Asean tier was introduced at RM35 for all airports.

Beginning January 2017, international PSCs at klia2 will be raised further to RM73 to match that of Kuala Lumpur International Airport (KLIA).

Earlier this month, AirAsia chief executive officer Aireen Omar reiterated the LCC’s longstanding criticism that KLIA’s services are far superior to that of klia2 in response to an article claiming that equalisation of PSC for international passengers at both terminals would be fair.

At 10.36am, AirAsia gained 0.32% or 1 sen to RM3.18 with 860,300 shares done.

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