2 September 2019
Airlines and passengers using the KL International Airport (KLIA) are losing out to other Malaysian airports, with the reduction of Passenger Service Charge (PSC) rates, says the International Air Transport Association (IATA).
Conrad Clifford, IATA’s Regional Vice President for Asia Pacific, said with the reduction, the government has created an uneven playing field for airlines, as well as cross-subsidisation of other airports or terminals by KLIA users.
“While the reduction in the PSC for beyond ASEAN destinations is positive for most travellers in Malaysia, we are disappointed the government has chosen to discriminate against the airlines and 28 million passengers using KLIA.
“If the intention is to offset the increased charges due to the departure levy introduced on Sept 1, the more straightforward way is to remove the departure levy altogether,” Clifford said in a statement on Monday (Sept 2).
On Friday (Aug 30), The government has reduced the PSC for international flights to RM50 from RM73 at all airports in Malaysia, except for KLIA, effective Oct 1.
The PSC rates for other sectors at all airports, however, remain at RM35 for Asean flights and RM11 for domestic flights.
Transport Minister Anthony Loke said the government decided to review the PSC charges to reduce the tax burden, in light of the new levy tax under the Departure Levy Act 2019, which comes into place on Sept 2.
IATA added that the government has also undermined the Malaysian Aviation Commission’s (Mavcom) credibility as a result.
“Mavcom is the appointed economic regulator for airports and has the mandate and authority to determine airport charges. There is an established process for setting airport charges, ” said Clifford.
On Jan 1 last year, Mavcom revised the PSC and imposed an equal rate of RM73 for international flights (non-Asean) at all airports.
Low-cost carrier AirAsia however, continued to charge its passengers RM50 until Aug 8 this year, as it felt the klia2 terminal, which it uses, is “inferior” to the full-service KLIA main terminal.
AirAsia Bhd group chief executive officer Tan Sri Tony Fernandes described the Cabinet’s latest decision as “a big win” for Malaysians and the country’s tourism industry.