Govt to review PSC and departure levy


THE government will relook into the structure of passenger service charges (PSC) and departure levy imposed on travellers flying out of Malaysia to ensure fairness, said Prime Minister Tun Dr Mahathir Mohamad.

As the PSC are similar for both low-cost and premium airline operations, Dr Mahathir believes it is not fair to do so.

“It is not fair for the low-cost airline operations and the premium operations to be charged the same airport tax,” he told reporters at a press conference during his visit to the AirAsia Group Bhd’s headquarters, RedQ last Friday.

Dr Mahathir said the federal government will be studying the structure of the airport taxes to ensure it is fair for all types of travellers.

“An equal tax rate cannot be imposed on everyone, and therefore, Putrajaya will take into consideration all matters, including the size of airlines, fares and costs,” Dr Mahathir reiterated.

The PSC, not to be confused with the government’s new departure levy that will kick in Sept 1, is charged by the government on all passengers leaving the country for the use of airport facilities and is collected by airlines such as AirAsia on behalf of the airport operator.

Effective July last year, Malaysia Airports Holdings Bhd (MAHB) had imposed a new PSC of RM73 on passengers using Kuala Lumpur International Airport 2 (KLIA2) to destinations beyond Asean, the same rate as at the full-service KLIA terminal and RM23 higher than the previous rate of RM50.

AirAsia co-founder and executive chairman Datuk Kamarudin Meranun had, on Aug 3 this year, said the move had only affected the carrier’s position as a low-cost airline and its subsequent success in turning Kuala Lumpur as the low-cost aviation capital of the world for the last 18 years.

The departure levy for outbound air travellers, which has become a bone of contention between the government and airlines since it was proposed in Budget 2019, will be implemented next month.

According to the Departure Levy (Rate of Departure Levy) Order 2019, anyone leaving Malaysia for Asean countries will be charged RM8 for flights in economy class and RM50 for other classes.

For flights to countries outside Asean, Malaysians travelling in economy class will be charged RM20 while those in other classes will have to fork out RM150.

On whether lingering issues among MAHB and AirAsia would affect the local aviation industry, Dr Mahathir said problems should be discussed and best be solved outside of court.

This is in regards to the latest defamation suit filed by MAHB and Malaysia Airports (Sepang) Sdn Bhd’s (MASSB) against AirAsia and AirAsia X Bhd (AAX).

Based on court papers, the plaintiffs pointed out three articles published by AirAsia and AAX from December last year to February this year, which implied that it was MAHB and MASSB had increased the PSC from RM50 to RM73.

However, the plaintiffs said it was the Malaysian Aviation Commission that had increased the PSC, as the statutory body responsible for air transport economic regulation.

Based on MIDF Research’s analysis, the percentage of departure levy charged from the total flight ticket is rather insignificant, ranging only from 1.5% to 3% from the total ticket price on average.