The disparity of approach to PSC by AirAsia to charge at a lower rate has distorted competition, says MAHB

By RAHIMI YUNUS / Pic By TMR

Malaysia Airports Holdings Bhd (MAHB) is resolving contractual matters related to passenger service charge (PSC) through court as it seeks to recover an average loss of RM7 million a month due to AirAsia Group Bhd’s disregard of the RM73 gazetted rate.

The airport operator noted that the disparity of approach to PSC by AirAsia to charge lower than the gazetted rate has distorted competition, which affects its ability to attract new airlines into the country and impair efforts in making Malaysia into a strong aviation hub.

“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 yesterday.

MAHB also cited dissatisfaction by the Board of Airline Representatives, an organisation representing the majority of full-service carriers operating in Malaysia, over AirAsia’s disregard of the gazetted rate.

“[The] practice is abhorrent, discriminatory and totally unacceptable as it creates an unlevel playing field,” MAHB quoted the organisation as saying.

MAHB said all other airlines operating at Kuala Lumpur International Airport 2 (KLIA2) collect and pay the PSC rate of RM73 for non-Asean international passengers, which is among the lowest regionally and globally.

The PSC, which is under the purview of the Malaysian Aviation Commission, is charged on departing passengers at all airports in Malaysia except at the short take-off landing ports in remote areas such as in Sarawak.

Starting 2018, the PSC rate for non-Asean international flights at KLIA2 has been made the same with those at KLIA and other airports in Malaysia; from RM50 to RM73.

The PSC rate for Asean was revised down from RM65 to RM35 in 2017.

In December, AirAsia Group’s wholly owned subsidiary AirAsia Bhd (AAB) and AirAsia X Bhd (AAX) were served with writ of summons totalled RM36.12 million by MAHB’s wholly owned unit, Malaysia Airports (Sepang) Sdn Bhd (MASSB) pertaining to the PSC which both companies had not collected from travelling passengers.

In recent exchange filings, AAB noted that it had received an unsealed copy of a writ of summons in the sum of RM9.4 million, while AAX’s writ of summons was in the sums of RM26.72 million for alleged PSC arrears.

In turn, AirAsia Group served a notice on MASSB recently to claim almost RM480 million for losses incurred from operating at KLIA2.

The budget carrier claimed, among others, RM99.6 million for runway closures, RM5.6 million for consequential failure to provide services, RM1 million for damage to aircraft and Internet outage, RM2.5 million for operations disruptions and RM371 million for loss of customers (from May 9, 2014, to 2018).

MAHB stated last Thursday that under the Conditions of Use 2017, the contract between MASSB and all airlines operating from KLIA and KLIA2 allows it to close part of the airport, or suspend, interrupt or shut down airport services and facilities if any repair, maintenance or upgrade of the facilities is needed provided reasonable prior notice is given and reasonable steps are taken to minimise the impact