AirAsia chief’s MAHB outburst ‘puzzling’

Tony Fernandes' rant against airport operator over passenger service tax uncalled for as the issue had been ironed out, say official.

PETALING JAYA: AirAsia CEO Tony Fernandes’s tirade against Malaysia Airports Holdings Bhd (MAHB) yesterday has caused anxiety among those working at the airport operator.

While MAHB has yet to issue an official response to Fernandes’ criticism over the hike in passenger service charges (PSCs), a source said his sudden outburst was puzzling as the issue was supposed to have been ironed-out.

“The new PSC took effect yesterday and prior to, it was announced several times. It was something regulated and approved by the government. So I’m not sure what Tony is making noise about,” the source told FMT.

The new rates took effect yesterday (Nov 15). International travellers now need to pay RM65 compared to RM51 earlier for departures at all Malaysian airports, except LCCT KLIA and Terminal 2 Kota Kinabalu, where the charges have rose from RM25 to RM32.

“I think the public needs to understand that the PSC or tax approved by the government falls under the purview of the Transport Ministry. MAHB does not hike charges as and when it pleases, unlike taxes imposed by airlines, which are not regulated,” said the source.

It is understood that under MAHB’s operating agreement with the government, the Transport Ministry decided sometime in 2009 that the PSC was to be RM65, and in July the new charge was officially gazetted. The decision was based on studies of market forces and comparison to airports in the region.

“The new rate of RM65 is among the lowest in the world. In fact, it is still the cheapest around the Asia-Pacific region,” said the source.

MAHB had initially planned to increase its rates on Sept 15, but was told by the ministry to put its plan on hold pending a review. It is understood that AirAsia had opposed to the hike.

However, the Transport Ministry’s subsequently approved the new rates following a review and the MAHB announced that the hike would take effect from Nov 15.

Fenandes under pressure

In other countries such as India and the UK, airport taxes include development charges to improve airport facilities but MAHB said that these charges do not apply in Malaysia.

“Similarly, we also collect airport tax from foreigners. A Korean traveling from Seoul would pay RM80 plus when he departs from his country and pays the same RM65 to the Malaysian government when they arrive here,” he said.

The source said that Fernandes has been under a lot of pressure recently, referring to the controversy over the MAS and AirAsia tie-up, and added that issues could be discussed and resolved.

On the possibility of the charges being withdrawn, the MAHB representative said:”Can you change overnight the percentage you pay for your income tax?”

Yesterday, Fernandes had lambasted the authorities over the the PSC in a series of tweets which questioned MAHB’s operations and objectivity of the Transport Ministry.

He called off a press conference where he was expected to have announced that AirAsia and AirAsia X would no longer collect PSC on behalf of MAHB.

Fernandes said that the RM7 increase for the LCCT (from RM25 to RM32) was unjustified and said LCCT was like “air-conditioned horse stable” on Twitter.

“AirAsia has been fighting to make them cheaper for the common man. Airport taxes are paid by Malaysians and passengers. The money doesn’t go to AirAsia but MAHB,” he said.

He also criticised MAHB for hardly improving guest handling facilities like signages, boarding areas at departure gates and the PA system.

Fernandes also attacked the government, training his guns at the Transport Ministry.

“Are they ensuring passengers get good value for the RM25 airport tax. The ministry’s secretary-general Long See Wool sits on the Malaysia Airports board. How can he be objective and play fair?” he asked.

Long’s representative said that he was not ready to respond to Fernandes.

Minister: Tax hike necessary

It is understood that MAHB would hold a press conference soon to explain the construction of a third runway at KLIA, which Fernandes had also criticised as a waste of money.

This is first time the government had approved a hike in PSC. MAHB also increased landing and parking charges yesterday which is to be implemented in three stages over three years.

Landing charges will be 9% higher and parking charges will be increased by 18% a year.

The last increase in 2002 was when the charges were raised to RM45 from RM40 for international passengers and to RM6 from RM5 for domestic departures.

In May 2007, the Transport Ministry halved the airport tax at LCCTs from RM51 to RM25 for international passengers and from RM9 to RM6 for domestic passengers.

MAHB manages and operates 39 airports in Malaysia. The latest tax, lobbied for by MAHB for several years, is expected to rake in an additional RM120mil to RM140mil for the government.

Today, Fernandes responded on Facebook to a query about the RM10 check-in charge AirAsia now imposes, saying that it was a move to cut costs for those who booked online.

Meanwhile, Transport Minister Kong Cho Ha said that the tax hike was necessary to cut subsidies that the treasury is currently paying for.

“If we don’t implement this (tax hike), then we are spending about RM180 million a year,” he said.

Kong added that the taxes are still the lowest in the region compared to countries like Singapore, Thailand and Hong Kong.