26 June 2018
AirAsia’s group CEO Tony Fernandes (pictured) has called out the Malaysian Aviation Commission (MAVCOM) once again. This time it is for the standardisation of the passenger service charge (PSC) between Kuala Lumpur International Airport (KLIA) and klia2.
This time, on a LinkedIn post, Fernandes said MAVCOM was established to support consumer rights and oversee the civil aviation industry to support Malaysia’s economic growth.
“But since its establishment, not only have consumers been bearing additional taxes and charges without reaping any benefits, Malaysia is now one of the few ASEAN countries with a decline in tourism,” Fernandes said. He added that instead of developing the aviation industry, the PSC implemented by MAVCOM contributed to a 3% decline in tourist arrivals to the country, adding that neither the airport taxes nor charges can develop the industry.
“For 16 years, the steady growth in volume of passengers that we have carried was solely due to lower fares and connectivity,” he said.As such, the airline “constantly lobbied” for the rakyat against the “unjustifiable” amount of the PSC, albeit getting rejected by MAVCOM due to “regional competitiveness and standardisation of airports” in Malaysia.
Formerly known as Airport Tax, the PSC is collected by airlines upon purchase of tickets and is only paid to Malaysian Airport Holdings (MAHB) upon completion of the flight.
He also said that no airports are built the same and a “one-size fits all” approach should not be adopted. Therefore, imposing equal charges for different levels of facilities and services is “discriminatory”. Fernades said this puts the less equipped airport at a disadvantage and more importantly, affects the low-cost market who are much more sensitive to price variations. His LinkedIn post added:
“An airline in any country cannot function without government support.”
The Malaysian aviation industry is regulated by MAVCOM, an extension of the Ministry of Transport (MoT) that was meant to act as an independent advisor along with the Civil Aviation Authority of Malaysia. At the same time, MAHB is owned by the government’s strategic investment arm Khazanah Nasional.
Fernandes described all areas of the business to be “highly regulated”, meaning “an invisible hand exist where [it] would never really be able to operate freely”. As such, the most AirAsia can do for citizens is to fight a battle that it can never seem to win.
“AirAsia’s role has always been to increase tourism and connectivity with low fares, but we can only achieve this by increasing flight frequency; basic demand and supply, like what we have been doing for the past 16 years,” the post read. Fernandes added that while AirAsia constantly aims to accomplish its mission of allowing everyone to fly, having regulators in the picture and adding “layers of unreasonable cost” for passengers is “just not right”.
He then called for MoT to regain the responsibility for reviewing charges reasonably and granting route approvals as it understands the importance and values the benefits of a liberal aviation industry.
Fernandes also hit out at MAVCOM in a series of tweets. While MAVCOM said it is protecting passengers, Fernandes questioned that claim, saying that it is unlikely possible as MAVCOM seeks to “raise airport tax” despite the facilities in klia2 being “vastly inferior” to that of KLIA, such as the lack of aero trains or seats, narrow corridors and poor check-in facilities.
“MAVCOM should walk the talk. Not just put press release out and say they are protecting the consumers,” he said.
This is not the first time Fernandes has taken a jab at MAVCOM. Following GE14 last month, MAVCOM said it is investigating Fernandes’ claims of being asked to cancel 120 flights during the election period. This was mentioned in his recent seven-minute long apology video.
In a statement on its website, MAVCOM said it considers Fernandes’ claims “serious allegations”. AirAsia then fired back at MAVCOM, strongly refuting the police report it made, stating that Fernandes’ claims are “fully supported by evidences and facts”.