PETALING JAYA: As the Department of Civil Aviation (DCA) readies to hike its charges, Transport Minister Datuk Seri Liow Tiong Lai said he feels airlines should not increase its fares because of it.
He said the DCA's one-fold air navigation facilities charges (ANFC) hike would only be a "small fraction" to the cost for the airlines and viewed the new fees as the minimum the Government could go.
This comes after the DCA announced its fee hike would be done in a staggered basis with a maximum one-fold increase, instead of the 10 fold increase it mulled over earlier in the week.
The ANFC, which charges airlines that fly plane in Malaysian airspace by nautical mile, has not been revised since 1970.
The DCA operates yearly with a RM250 million budget but only makes RM50 million from its fees. The remaining RM200 million is subsidised by the Government.
Speaking to reporters, Liow further explained that hikes in DCA's fees would now be done with the engagement of airlines and may only be sporadically over a number of years, depending on how ready the airlines are for it.
In return, he said the DCA would up their services for the airlines, by cutting down on waiting time in the skies and allowing them to choose their routes, which could save them fuel.
"It’s a win win. The airlines all know. And they agree that we should have a win win situation over time.
"The DCA will continue to engage with them on the hikes. We will have a staggered fee hike for the next few years. "At least then the airlines would all know what year and what time the fees will go up, so they can plan for it," he said during a dinner with the Institute of Engineers Malaysia (IEM) in Bandar Sunway, Saturday.
When asked if airfares are expected to go up in tandem with the DCA hike, Liow said it was unfair for pricier tickets from the airlines to be attributed to the new charges.
"As you can see its only a minimal increase. I think after this the fees hike won't have much impact on airfare.
"There are so many factors that affect ticket prices like fuel cost and supply and demand factors. It's not one factor that caused the airline fares to go up. It's a bit unfair to say the airfare goes up because of the DCA fees," he said.