More than 75% of MAHB airports unprofitable

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

Malaysia Airports Holdings Bhd (MAHB) said more than 75% of its network of 39 airports are not commercially viable.

“These airports are managed on a cross-subsidisation model in order to provide Malaysians with the required connectivity among its smaller towns and rural outposts.

“Maintaining this network of airports has involved a huge outlay of both capital and operational expenses,” MAHB said in a statement rebutting an article published by a local daily last Friday.

It said the article, which suggested that the lack of airport operators in the country had led to an untenable rise in airport charges, was “incorrect” as the charges are regulated by the government, through the Malaysian Aviation Commission (Mavcom).

“It was made known by Mavcom that in determining the charges, the commission had engaged a world-renowned consultant to perform a detailed independent research and gone through a comprehensive user consultation process,” MAHB said.

In comparison to its regional competitors, MAHB said Malaysia’s passenger service charges (PSCs) are among the lowest. The country’s domestic PSC is RM11, and its international PSC is RM35 for Asean and RM73 for non-Asean destinations.

With a passenger traffic split of about 50:50 between international Asean and non-Asean passengers, its average international PSC is around RM54.

Likewise, MAHB said its landing and parking charges are also the lowest in the world among similar-sized airports.

In Singapore, all departing passengers are expected to pay the passenger service and security fee (PSSF), which include additional items such as airport levy and airport development fee on top of the PSC. As at July 1, 2018, passengers departing from Changi Airport will have to pay S$47.30 (RM140.71) in PSSF.

“It is also worth noting that 70% of the international passenger traffic for Malaysia comprise foreigners who are enjoying the lower PSC offered to travel to our country.

“On the contrary, Malaysians and other nationalities who travel to or from other countries pay a much higher PSC at other foreign airports, which has contributed to the development and betterment of those airports such as Changi,” MAHB said.

It stressed that all aeronautical charges imposed by the company are determined by the country’s regulatory authorities.

“Therefore, it is inaccurate for Boo Su Lyn to insinuate that MAHB can charge whatever it likes because it is a monopoly,” the airport operator said, referring to the writer of the report.

MAHB said any revision of charges must go through the stringent mechanism set out by the government which, in the end, must be below regional levels.

In short, the company is not able to introduce any ancillary charges unless decided by the government and by this argument, cannot be considered a monopoly.

“We hope our clarification will give better context to the members of the public on this matter,” MAHB added.