22 July 2019
AIRASIA Group Bhd and AirAsia X Bhd collectively will appeal against the Kuala Lumpur High Court’s ruling ordering them to pay a total of RM40.7 million in unpaid passenger service charge (PSC) to Malaysia Airports (Sepang) Sdn Bhd (MASSB).
The low-cost carriers (LCCs) last week were ordered to pay a combined sum of RM792,381.74 in unpaid late payment charges to the subsidiary of Malaysia Airports Holdings Bhd (MAHB).
“AirAsia strongly believes that the court has erred and we will appeal this decision. AirAsia will apply for a stay of execution and challenge MASSB’s and its parent MAHB’s actions — which we maintain, are a burden on all travelling Malaysians — until we exhaust all avenues available under the law,” the carriers founders Tan Sri Dr Tony Fernandes and Datuk Kamaruddin Meranun said in a statement last Friday.
The group noted that its actions are not a matter between AirAsia and MAHB only.
“In the event we lose in the highest courts of appeal, it is passengers, especially Malaysian travellers, who will have to pay the differential MAHB is charging. We believe the people of Malaysia should have the right to a fair deal,” the carrier added. AirAsia and MAHB have been entangled in a battle since last year about the increase of
PSC to RM73 from RM50. AirAsia said the quality of services at Kuala Lumpur International Airport 2 (KLIA2) is not up to par to justify the increase. This resulted in MAHB filing claims against the LCC last year, prompting a counter-claim from AirAsia of more than RM400 million towards MAHB filed. AirAsia said since July 2018, about five million passengers have benefitted from the lower PSC.
AirAsia also noted that it sought help from the Malaysian Aviation Commission (Mavcom), but Mavcom has refused to intervene, going against the provision of the Mavcom Act.
“The failure of Mavcom to intervene and mediate is also causing a further and bigger division in this industry, which leads to a big drop in tourist arrivals and causes greater damage to the nation’s economy,” the joint statement from the carrier’s founder read.
Meanwhile, AirAsia CEO Riad Asmat concluded this ongoing issue as a reflection on MAHB’s poor governance and is disappointed the LCC is being treated as inconsequential.
AirAsia X CEO Benyamin Ismail said MAHB has painted an inaccurate picture to the public by suggesting both KLIA and KLIA2 are on the same level in terms of quality and service, which is untrue for anyone who has used both terminals before.
“AirAsia has also been facing numerous operational issues with KLIA2, including frequent unplanned runway closures, uneven aprons and taxiways, and a poor airport design that requires long walks to gates causing passengers to be delayed or lose their way,” he said.
Aviation analysts believe the financial impact of the court decision will account for less than 3% of AirAsia cashpile, if the PSC is calculated up to end June.
AirAsia’s shares rose one sen to RM2.87 last Friday, while AirAsia X’s shares rose half a sen to 23.5 sen a share.