23 January 2019
AirAsia Group Bhd is seeking more than RM400 million in counter-claims against Malaysia Airports Holdings Bhd (MAHB) in response to a suit filed by the airport operator last month over outstanding airport taxes.
The counter-claims are for losses and damages experienced by AirAsia and its long-haul sister airline, AirAsia X Bhd (AAX), due to operational disruptions at klia2, the budget airline said in a statement today.
Among the disruptions, it said, was a ruptured fuel line that impeded operations at Pier P for over a month at klia2 last October, closures at Runway 3 on numerous occasions throughout the previous year, and losses incurred due to additional aircraft towing requirements and fuel costs, delays, manpower needed, and flight cancellations that resulted in loss revenue and taxiing costs.
Recall that MAHB had, in December last year, sued the low-cost carrier and AAX for a combined RM36.11 million for the unpaid airport taxes or passenger service charges (PSC) for international departures.
The PSC is paid by departing passengers and is collected by the airlines upon purchase of tickets. It is later passed on to MAHB upon completion of the flight. While the PSC has been set at RM73 per passenger beginning Jan 1 last year for passengers flying out of klia2 and the Kuala Lumpur International Airport (KLIA), both airlines had only been collecting RM50 per passenger. MAHB demanded that the airlines pay up the RM23 difference per passenger from July onwards.
In their statement of defence, both the airlines slammed MAHB for being heavy-handed in filing the suit, AirAsia’s statement today read. They have also applied to strike out MAHB’s suit on grounds that it is “misconceived and premature as MAHB has not complied with the statutory provisions for dispute resolution within the Mavcom Act 2015 Act”.
According to AirAsia, provisions of the act state that both MAHB and airline operators have a statutory obligation to mediate any disputes, and that legal action may only be used as a last resort when mediation efforts failed.
“AirAsia has always been prepared to engage constructively with MAHB and its subsidiaries, and it is regrettable that MAHB has chosen litigation for reasons best known to them,” said AirAsia Bhd CEO Riad Asmat and AAX CEO Benyamin Ismail.
“We maintain that the dispute over airport taxes, which is at the core of MAHB’s suit, is specifically a matter subject to the Malaysian Aviation Commission‘s (Mavcom) purview for mediation and dispute resolution. MAHB is well aware of this and prior to filing the suit, had engaged AirAsia in both oral discussions and written correspondence. However, MAHB has chosen to improperly circumvent the Mavcom Act by filing the suit.
“We will continue to adhere to the legislative provisions under the Mavcom Act and seek our claim through mediation. However, we reserve the right to exhaust all avenues in recovering losses and damages caused by MAHB’s failure to carry out their duties as aviation service providers. We have repeatedly communicated these and other issues to MAHB but nothing has been done,” the two CEOs said.
They also maintained that travellers flying from klia2 should not be made to pay the same airport tax as those departing from KLIA because the former provides “inferior services”.
MAHB has also done a poor job of maintaining klia2, they said, citing the discovery of maggots and rats at the terminal as an example.
“MAHB does not provide the same level of service at klia2, where AirAsia operates from, compared to KLIA, which is a terminal for full-service carriers. It is for this reason that we have refused to collect the higher airport tax imposed by MAHB on non-Asean international passengers departing from klia2,” the two CEOs added.
The airline group further maintained that MAHB is now charging higher airport taxes because it is now seeking to recover from the travelling public the cost overruns it experienced after failing to manage costs during the construction of klia2.