28 May 2018

The Malaysian Aviation Commission (Mavcom) is conducting a study to review the existing Passenger Services Charges (PSC), more commonly known as the airport tax, and will introduce a new set of rates based on airport facilities, according to Transport Minister Anthony Loke Siew Fook.

At a Press conference after meeting Mavcom's top guns today, Loke said three matters were discussed: the PSC rate, Mavcom's service charge of RM1 per passenger, and the ceiling price for air fares during the festive season.

Loke said he was told in the meeting that Mavcom originally planned to implement the new set of PSC by Jan 1, 2020, but the Minister told Mavcom to put in place the new PSC charges earlier, by Jan 1, 2019.

"Not all airports have the same facilities as KLIA. KLIA is a premium airport, so other airports like those in Langkawi and Penang are not as prestigious as KLIA. So charges have to be in accordance with the facilities, so Mavcom has to study the rates again and the review has to be expedited, as this impacts all passengers directly. If possible, we hope to introduce the new set of rates by next year," he told reporters after the meeting.

Since Jan 1, 2017, Mavcom had standardised the PSC for all airports in the country to RM11 for domestic destinations, RM35 for Asean destinations, and RM73 for international destinations beyond Asean; the PSC for international destinations at klia2 was set lower at RM50.

Loke said the lower PSC at klia2 is good for the passengers, and that it was possible because the airport operator Malaysia Airports Holdings Bhd (MAHB) and airlines flying out of klia2 were able to come to an agreement.

"That is between airlines and airport [operators]. Mavcom only sets a ceiling price. Of course if the airport [operators] and airlines could come to an agreement on a lower charge, to me that is good for the passenger. I am sure Mavcom has no objection to that because that is just a ceiling price," he said.

On the RM1 Mavcom service charge per passenger, Loke said the annual collection is expected to be RM35 million, to fund the commission's annual budgeted expenditure of RM25 million, including salaries for 59 staff under Mavcom.

Loke said Mavcom will set aside the surplus of the collection into a dedicated fund, which will be used to develop the aviation industry.

The Minister also assured that all the collections and expenditure by Mavcom will be reported to Parliament every year, to ensure transparency.

Loke went on to share that the meeting also discussed the possibility of capping air fares during festive season, for the benefit of citizens who are traveling back home between East and West Malaysia.

"Mavcom will conduct a study on this, because this issue has been brought up in Parliament many times. People are complaining that air fares to travel home between the peninsula and East Malaysia are very expensive during the festive season, so we hope to study it and see whether there is a possibility of putting a cap on the air fares," he said.

"We do not intent to distort the market, but we also have to take care of the welfare of those who want to go home. For those who want to travel to East Malaysia there is no alternative other than flying there. But this (cap on air fares) cannot be implemented immediately, we have to study," he said.

On whether the new government would consider re-merging Mavcom and the Department of Civil Aviation, Loke said: "If we have a decision on that, we will inform the public."

Original Source: theedgemarkets