12 August 2019
By Joanna Bailey
AirAsia has launched a petition against what they are calling ‘unfair’ passenger service charges at Malaysia’s airports. The budget carrier says charges have been increased more than 200% in three years, and argue that passengers using low-cost hubs should pay less than those using full-service airports.
Problems at klia2
In July 2018, Malaysia Airports (MAHB) raised the tax on passengers departing via Kuala Lumpur’s newer airport, klia2. Previous to this, departing passengers had been charged a lower rate at this than at the other KL airport, KLIA. This price increase served to equalize the charges at both airports.
AirAsia was not happy with this, claiming that the hike was unfair and didn’t represent the level of service available to passengers at klia2. It claimed that klia2 was always designed to be a low-cost hub, with fewer amenities and a less luxurious experience than the original KLIA airport.
In protest of the hike, the airline proceeded to not collect the additional charge from their passengers. Business Insider reports the CEO of AirAsia Malaysia, Riad Asmat, as saying,
“klia2 is a low-cost terminal with far lower levels of service provided to passengers, compared to KLIA, which is a full-service terminal”.
He went on to say that the carrier had previously lodged a number of complaints in relation to klia2. These were apparently related to,
“…substandard infrastructure and access at klia2 which has negatively impacted our operational performance and punctuality… From our calculations, these cross-claims far exceed the amount of airport tax that we have refused to collect for MASSB from our passengers”.
The carrier continued to operate flights after the charge increased, collecting only the previous amount of RM50 from each traveler.
Forced to pay
While the active protestation of the charges hike was somewhat admirable, it was not to last. In December 2018, Malaysia Airports issued a summons to AirAsia to pay back the charges they owed. A year after the charges came into effect, the Straits Times reports that AirAsia group was ordered to pay RM41.52m ($9.88m) in unpaid airport charges to MAHB.
This amount was made up of RM40.73m in charges themselves, plus another RM792,381.74 in late payment charges. The judgment not only meant AirAsia had to pay back what they owed, but also that they had to begin collecting passenger service charges as prescribed by MAHB.
As such, AirAsia now has no choice but to begin collecting the full RM73 passenger service charge levied by MAHB. Indeed, it began doing so on August 9th, but under protest.
Group chief executive, Tan Sri Tony Fernandes told the Straits Times,
“I’m so disappointed and frustrated. All we have ever asked is for MAHB to understand our model and help us to create more jobs. We are the LCC, it’s (MAHB) largest customer yet,”
Launching a petition
Not being one to take things lying down, AirAsia has rallied to gather support for their appeal against the additional charges at klia2. Launching a petition via Change.org, the carrier has highlighted what they say has been a 200% increase in passenger charges in the past three years.
Until the end of 2016, it says it was paying just RM32. From January 1st, 2017, it began paying RM50, and from July 2018 was supposed to be paying RM73. They say that,
“We believe that high PSC stifles tourism, hampers economic growth and makes Malaysia considerably less attractive to visitors compared to other destinations.”
Clearly, they are not alone in their opinion that these charges are unfair, having gathered more than 50,000 signatures since the petition launched. Whether it will have any impact on the AirAsia’s appeal against the judgment remains to be seen.
Do you think the charges are fair? Should passengers at low-cost hubs pay less service tax than those at full-service airports? Let us know in the comments.