Fernandes says high airport fees could scare carriers away


  • Business
  • Thursday, 27 Sep 2012

KUALA LUMPUR: Kuala Lumpur risks losing its status as Asia's busiest low-cost airline hub because high passenger fees could scare carriers away, Tan Sri Tony Fernandes, head of Malaysia's AirAsia said.

Fernandes warned regional airports such as Don Mueang in Thailand and Clark in the Philippines would soon been charging less than the RM32 passenger fee at the Kuala Lumpur budget terminal used by AirAsia.

“We (Malaysia) are going to lose our competitive edge. Our costs are going up every day,” he said at the launch of an AirAsia badminton training academy.

The AirAsia founder urged authorities not to “kill something that is good”, as rivals scramble for customers during a global slowdown, and vie for business from China which has a huge number of passengers from the emerging middle class.

Clark is expected to soon cut its fees levied on each ticket sold to around US$9 (about RM28), while Don Mueang, Bangkok's second airport which AirAsia is shifting to from Monday, is also expected to undercut Kuala Lumpur.

Fernandes warned that high passenger costs would translate to higher fares and this would discourage people from travelling to Malaysia, which would deliver a “blow” to the country's tourism industry.

“The reality is every airport around the region is reducing charges. Clark will cut by at least 30%,” he said. Don Mueang begins serving low-cost airlines from Monday.

“We want to make sure Malaysia remains the main (low-cost) hub. Everyone will lose out at the end,” he said.

AirAsia operates from the Low Cost Carrier Terminal (LCCT) near the Malaysian capital's main Kuala Lumpur International Airport.

Its long-haul budget counterpart AirAsia X has stopped its services to India from its Kuala Lumpur hub due to steep increase in charges at Delhi, Mumbai and Hyderabad airports.

AirAsia X has also pulled out from Paris and London, citing a controversial new carbon tax the European Union has imposed.

AirAsia Malaysia chief executive officer Aireen Omar told AFP that the charges in Malaysia were “about 15% to 20% of (operating) costs”. - AFP

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