Passenger service charge ruling: AirAsia, AirAsia X to appeal

KUALA LUMPUR: AirAsia Bhd and AirAsia X Bhd will be appealing against the High Court ruling which required them to pay the outstanding passenger service charges (PSC) to Malaysia Airports (Sepang) Sdn Bhd (MASSB). In a statement issued yesterday, both airlines said they were taken aback by the court ruling which dismissed their application to strike out the PSC payment.

AirAsia founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun said: “AirAsia strongly believes that the court has erred and we will appeal this decision. AirAsia will apply for a stay of execution and challenge MASSB’s and its parent Malaysia Airports Holdings Bhd (MAHB’s) actions - which we maintain are a burden on all traveling Malaysians - until we exhaust all avenues available under the law.”

“We would like to reiterate that these legal challenges are not simply a matter between AirAsia and MAHB.

“In the event we lose in the highest courts of appeal, it is passengers, especially Malaysian travelers, who will have to pay the differential MAHB is charging.

“We believe that the people of Malaysia should have the right to a fair deal,” they added.It was reported that both airlines now have to pay RM40.73mil to MASSB over unpaid PSC from July to December last year.”

Fernandes and Kamarudin said for the record, the monies being claimed against AirAsia by MAHB were to be collected from the passengers.

AirAsia did not collect the differential amount or withhold its payment to MAHB.MAHB had imposed a new PSC of RM73 for passengers using KLIA2 to destinations out of Asean effective July 2018.

This amount is RM23 higher than the previous rate of RM50 that AirAsia has continued to collect from passengers.

Since then, almost five million passengers have benefited from this lower PSC.

“AirAsia has since the beginning opposed this increase in PSC arguing that passengers using the inferior KLIA2 cannot be forced to pay the same charges as that of the better-equipped and more luxurious KLIA.

“On that principle, AirAsia has not collected the extra charges imposed by MAHB,” they said

Fernandes and Kamarudin said they have sought for the Malaysian Aviation Commission (Mavcom), which is funded by the public through the RM1 regulatory service charge per travelling passenger, to mediate as provided under the Mavcom Act.

“Unfortunately, Mavcom has refused to intervene. We will continue to challenge Mavcom’s decision to not intervene, which clearly goes against the provisions of the Mavcom Act.

“The failure of Mavcom to intervene and mediate is also causing a further and bigger division in this industry, which leads to a big drop in tourist arrivals and causes greater damage to the nation’s economy,” they said.

In the same statement, AirAsia CEO Riad Asmat said: “This is a clear reflection of poor governance on MAHB.

“There is not even a binding Service Level Agreement (SLA) provided by MAHB for the use of KLIA2 by AirAsia, except for a Conditions of Use (COU) agreement which is drawn up unilaterally by MAHB and imposed on AirAsia on a take-it-or-leave-it basis.

“To be fair, MAHB did ask for AirAsia’s input for the COU but none of our feedback was taken into account.

“AirAsia has requested for further consultation pertaining to the COU and is awaiting response from MAHB.

“We are deeply disappointed that as an airline group that brings 97% of the overall passenger traffic to KLIA2, MAHB - solely because of its position as the sole airport operator in Malaysia - treats AirAsia as inconsequential,” he said.

AirAsia X CEO Benyamin Ismail said:

“MAHB is painting an inaccurate picture to the Malaysian public by suggesting that KLIA2 and KLIA are on par in terms of quality and service.

Anyone who has used both terminals knows that this is an untruth and an attempt to justify higher earnings for MAHB, whose profits have been growing considerably because of such arbitrary decisions.”

Benyamin added: “AirAsia has also been facing numerous operational issues with KLIA2, including frequent unplanned runway closures, uneven aprons and taxiways, and a poor airport design that requires long walks to gates causing passengers to be delayed or lose their way.”

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