20 September 2019
AIRASIA Group Bhd and AirAsia X Bhd (AAX) have paid a total sum of RM41.5 million to Malaysia Airports Holdings Bhd’s (MAHB) wholly owned subsidiary, Malaysia Airports (Sepang) Sdn Bhd (MASSB), concerning MASSB’s claim for additional passenger services charges (PSC).
AirAsia Group, in an update with Bursa Malaysia yesterday, stated its wholly owned subsidiary AirAsia Bhd (AAB) had on Sept 18, 2019, paid a sum of RM14.16 million to MASSB to defray the garnishee execution proceedings.
“The payment was made by AAB without prejudice to AAB’s rights, including AAB’s rights in the appeals made concerning the judgement order dated July 18, 2019, as well as any connected interlocutory applications,” the company said yesterday.
AAX, in its filing with the exchange, noted it had on Sept 17, 2019, paid RM27.39 million of the same charges to defray the garnishee execution proceedings as well.
“The payment was made by our company without prejudice to our company’s rights, including our company’s rights in the appeals made with the judgement order dated July 18, 2019, as well as any connected interlocutory applications,” the company said yesterday.
Both the low-cost carriers noted the sums paid were the amounts specified in the Garnishee Show Cause Order dated Aug 23 this year from the MAHB unit.
On Sept 6, MASSB had served garnishee show cause orders dated Aug 23, 2019, on three banks that serve AirAsia and AAX, directing such banks to set aside certain funds for payment of the judgement sums.
A garnishee order is a form of enforcing a judgement debt against a creditor to recover money.
This came after the High Court on July 18 ruled that AirAsia and AAX would pay at least RM40.6 million in unpaid PSC to MASSB.
AirAsia Group shares closed yesterday one sen lower at RM1.79 (market cap of RM5.98 billion) while AAX closed unchanged at 17 sen valuing the company at RM705.19 million.
The payments came on the heels of AirAsia substantial shareholder Tan Sri Dr Tony Fernandes, announcing relinquishment of his board positions except at AirAsia and AAX.
The disagreement over the PSC has long been disputed between AirAsia and MAHB, with both parties filing suits against one another.
To recap, AirAsia Group in an exchange filing dated Dec 11, 2018, said it had received from MASSB a Writ of Summons in the sum of RM9.4 million pertaining to PSC that AAB has not collected, and refuses to collect, from travelling passengers.
AirAsia Group had stated then that it had collected RM50 per non-Asean international passenger and paid to MASSB.
“However, MASSB wants us to collect another RM23 per passenger effective July 2018 which we have not and will not collect. MASSB insists that Kuala Lumpur International Airport 2 (klia2) should charge the same rates as KLIA.
“We strongly believe klia2 is a low-cost airport and the charges levied should reflect the level of services provided.
“We maintain that we are not obliged to collect the same PSC for passengers departing from klia2 and will not do so for the sake of all the stakeholders in the aviation and tou- rism industries,” the company said.
AirAsia Group pursued cross-claims against MASSB about the infrastructure and state of the airports and its operations which include major apron defects, random closure of runways, damage to aircrafts and rupture of fuel pipelines.
“We believe these claims far exceed the claims MASSB is seeking. We have attempted — without success — on numerous occasions to engage MASSB on these issues but regrettably MASSB has decided to bring these issues to the public arena by commencing legal action,” the company said.
Meanwhile, AAX in an exchange filing dated Dec 11, 2018, said it had received from MASSB a Writ of Summons in the sums of RM26.72 million for alleged PSC arrears. The arrears were similar to AirAsia Group earlier.
AirAsia group CEO Fernandes in a recent Linkedin post claimed the Malaysian Aviation Commission (Mavcom) had failed the nation’s aviation sector, providing his list of reasons.
Among the complaints raised by Fernandes is the RM1 “Regulatory Service Charge” imposed on all passengers flying out of airports in Malaysia, in addition to the PSC and departure levy.
Fernandes claimed this was an unnecessary burden for passengers who are collectively paying close to RM30 million a year to cover the operating costs of the regulator which he believed did not represent their best interest.
Mavcom executive chairman Dr Nungsari Ahmad Radhi responded its policies are for all stakeholders and not for a single entity.