AirAsia's Fernandes: Airport tax hike regressive; hinders economic, job growth

  • Business
  • Thursday, 14 Jul 2016

Lower tax: Passengers flying out of KLIA2 pay lower airport tax than those at KLIA’s main terminal building presently. But the tax rate may be increased, according to a report.

LONDON: Leading low-cost carrier AirAsia Bhd contends that raising the airport tax for passengers using KLIA2 would be a regressive step and hamper economic growth of the country.

AirAsia group chief executive Tan Sri Tony Fernandes said that a proposal to raise passenger service charges (PSC) was not justifiable and would only hamper the economic growth and job creation in the country.

Describing it as a backward step for Malaysia, Fernandes said the low-cost carrier had grown because of low charges.

“By having low cost, we can bring in more people. Until last year, Dubai had never charged PSC and was free of such charges.

“We are explaining to the relevant authorities that this is a volume game and not every airport is the same. KLIA2 has double the size because of AirAsia,” he said at a briefing on the sidelines of the Farnborough Airshow here.

The target was to carry 100 million passengers, he noted.

Fernandes was responding to a news report that the Malaysian Aviation Commission was looking to review the country’s PSC.

Passengers flying out of KLIA2 at the moment pay lower airport tax than those departing KLIA’s main terminal building.

In 2011, the Transport Ministry had raised the tax for international travellers departing the country’s international airports from RM51 to the current RM65 and from RM25 to RM32 at the old low-cost carrier terminal and Terminal 2 of the Kota Kinabalu International Airport.

Citing sources, a Malaysian business weekly reported that the review of the PSC could be completed this year and might adopt different passenger charges at KLIA2.

Fernandes reiterated that it was not advisable to raise the tax. “Don’t kill the golden goose but build the golden goose,” he said.

Asked on his recent comments on social media stating that KLIA2 was a “Frankenstein” airport, he said AirAsia needed a dedicated low-cost airport in view of massive opportunities for such airports in the country.

“Malaysia needs low-cost carrier terminals. For years, we have played second division to Singapore. For the first time in Malaysian aviation history, Singaporeans are flying to KL using AirAsia,” he added.

Commenting on wire reports that the group was looking for a dual listing in Hong Kong, Fernandes said this was something that AirAsia was looking at in terms of building its presence in North Asia, which is an important market for the airline.

“We have moved from an Asean-based airline to an Asian one. There is obviously a lot of capital from North Asia which we want to attract. We are interested to have more operations in China and Japan,” he said.

AirAsia hopes to start operations in Japan by January next year or if possible earlier, according to Fernandes.

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