AirAsia ordered to pay RM40.7m, Fernandes launches Twitter tirade

The court decision would prevent other carriers from unilaterally deciding on the PSC amount they want to charge their customers


AIRASIA Group Bhd’s share price slumped four sen yesterday after the court ordered the low-cost carrier and its sister carrier AirAsia X Bhd to pay a combined amount of RM40.7 million in unpaid passenger service charge (PSC) to Malaysia Airports (Sepang) Sdn Bhd (MASSB).

The court also instructed the carriers to pay a combined amount of RM792,381.74 in unpaid late payment charges to the subsidiary of Malaysia Airports Holdings Bhd (MAHB).

The court judgement yesterday morning did not impact AirAsia X’s share price as it was traded unchanged at 23 sen. However, AirAsia’s share price slumped 1.38% to close at RM2.86.

MAHB and AirAsia have been at loggerheads since last year over the increase in the PSC, with the former stressing that its operation and charges are guided by gazetted laws.

AirAsia has maintained that the quality of services at the Kuala Lumpur International Airport 2 (KLIA2) is not up to the mark to demand for any increase in the PSC.

MAHB filed the claims against the carriers last year. The frills-free airlines then retaliated and filed a counter-claim to seek more than RM400 million from MAHB.

The Malaysian Aviation Commission (Mavcom), the regulator of the country’s commercial aviation sector, was also dragged into the dispute.

AirAsia and AirAsia X had filed a judicial review application against Mavcom for declining to meditate the disputes between the carriers and MAHB. However, the High Court has since dismissed the application of the carrier.

“The summary judgment order further included a declaration for AirAsia to pay MASSB the PSC rates that have been gazetted in law,” MAHB said in a statement to Bursa Malaysia. The court decision is seen as a key victory for MAHB as it would prevent other carriers from unilaterally deciding on the PSC amount they want to charge their customers.

Mavcom had increased the PSC from RM50 to RM73 effective Jan 1, 2018, but AirAsia continued to collect RM50 from each passenger.

Meanwhile, AirAsia group CEO Tan Sri Dr Tony Fernandes went into a Twitter diatribe yesterday, taking swipes at Mavcom and MAHB.

“Please tell me what Mavcom does. Slows down our growth by taking forever to approve routes? Charge unfairly to our guests airport tax. No regulation on airport? And the worst, every passenger pays RM1 every time they fly so Mavcom can have a budget!!!!!!!!” he tweeted yesterday.

Venting his disappointment against MAHB, Fernandes added: “All we have ever asked is for MAHB to understand our model and help us. Help us create more jobs. We are a low-cost carrier, its largest customer yet…

“For those who don’t understand some of (the) difficulties we face at KLIA2. The gate is not flat!!!! So, we had to be towed to the gate. So many differences. So many difficulties, yet MAHB expects our passengers to pay the same airport tax. (Isn’t this) unfair?”

In a reply to the aviation tycoon’s tweet, MAHB said: “Dear Tan Sri (Fernandes), we’d like to inform you that these types of incidents are extremely rare. Since Jan 19 to date, there’ve been more than 100,000 total aircraft movements at KLIA2 and only 19 such incidents reported (0.00019% of total aircraft movement at KLIA2), all by AirAsia aircraft.

“There have been no similar issues reported by other airlines operating at KLIA2. Nevertheless, when such incidents happen, we immediately conduct a gradient survey study to rectify the situation,” the airport operator said.

Netizens on Twitter are also divided in their responses to the tiff between the carrier and airport operator.

One Twitter user replied: “For every complaint you have against MAHB, the passengers have 10 more against AirAsia!”

On the other hand, MIDF Research analyst Adam Mohamed Rahim said the recent development will have a minimal impact on AirAsia as the charges account for only 1.4% of its cash pile as of March 31, 2019.

“Assuming it would be larger at roughly RM81.2 million after considering the January to June 2019 (period), the impact will still be immaterial at 2.8% of AirAsia’s cash pile,” he said.