SEPANG, 26 July 2019: AirAsia Group dismissed as “inconsequential and self-serving” the comments made by the Board of Airline Representatives (BAR) on the low-cost carrier’s ongoing dispute with airport operator Malaysia Airports Holdings.
BAR represents the interests of mainly legacy airlines in Malaysia in discussions with the government, airports and other agencies linked to aviation.
In a statement released Thursday, AirAsia CEO Riad Asmat said: “BAR has no standing in this issue as neither do their member airlines operate from klia2 nor affected by the court decision, rendering their comments inconsequential and immaterial.
“We don’t believe that BAR is capable of making positive contributions or comments as they do not represent budget airlines or those who travel on budget airlines.”
BAR, which claims to represent most of the airlines operating in Malaysia, yesterday welcomed the High Court’s decision to dismiss an application by AirAsia and AirAsia X to strike out suits by the airport operator over the payment of outstanding airport tax, saying it was glad that the equalisation of passenger service charges (PSC) was “finally happening” after so long.
The High Court ruled last week that AirAsia and AirAsia X must pay MYR40.6 million in outstanding PSC that the two airlines had refused to collect from passengers.
MAHB’s subsidiary Malaysia Airports (Sepang) Sdn Bhd (MASSB) collects the charge from the airlines that in turn include the fee in the ticket price.
AirAsia Group is appealing the court decision.
Riad said that there was a misconception that the AirAsia Group has defaulted in paying the amount claimed by MAHB.
“It must be stressed that AirAsia did not collect these monies from the passengers as we believe they should not be burdened unfairly paying for an inferior service as they would for the more well-equipped and spacious KLIA. Instead, MAHB sued AirAsia to recover this uncollected amount.”
BAR had alleged in a statement that AirAsia’s refusal to collect the extra-imposed PSC charges from passengers “had led to an uneven playing field.”
“We believe in and want a level playing field. It is not for any particular airline to dictate. In any other country, the stunt by AirAsia to not collect the mandated amount or withhold taxes and fees would have resulted in penalties and even aircraft being impounded,” BAR was reported as saying.
A representative of Malaysia Airlines leads the BAR committee.
Riad pointed out that no BAR’s full-service member airlines operate at klia2. In contrast, AirAsia Group accounted for almost all of the passengers travelling through the budget terminal. It even exceeded the total number of passengers flown through KLIA by BAR’s 39 member airlines combined.
Based on MAHB’s passenger traffic data, of the 31.89 million passengers who went through klia2 in 2018, 30.91 million or 97% were carried by AirAsia Group.
For comparison, at the KLIA main terminal which caters mainly to BAR’s full-service member carriers, only 28.1 million passengers passed through its gates in 2018.
Additionally, Riad said: “Since 2017 until June 2019, a whopping MYR1.4 billion or 75% of the total charges and fees paid and remitted by AirAsia Group to MAHB is made up of PSC which is in reality paid by the passengers. This does not include the extra MYR23 which AirAsia is supposed to, but has refused to collect from passengers travelling to destinations outside of ASEAN.”
The remaining 25% of payments to MAHB comprise other airport charges including landing, parking, aerobridge and facilities rental that are borne by AirAsia Group, he said.
MAHB – which claims it is imposing the extra PSC because this has been mandated by MAVCOM, itself funded by travelling passengers who each pay MYR1 which goes towards sustaining its operations – reported a massive 202.6% jump in net profit for 2018 to MYR727.3 million from the previous year.
“We maintain that a considerable portion of MAHB’s revenue and profit is contributed by air passengers through the PSC, which AirAsia has diligently collected and remitted to MAHB in full according to payment terms as agreed by both parties. That is why we have refused to burden our passengers by collecting the extra MYR23 for use of an inferior airport at klia2 compared to the more luxurious and better equipped KLIA which houses the BAR representatives and their airlines,” Riad said.
Riad concluded that BAR’s views are skewed
towards protecting the commercial interests of full-service airlines while
ignoring various issues faced by low-cost carriers (LCCs) in Malaysia.
“BAR should, instead of being biased, recognise
that LCCs and LCC operations form an integral part of the nation’s aviation and
tourism industry. They should look at the broader picture of growing Malaysia’s
aviation industry and tourism sector, as espoused by Prime Minister Tun Dr
Mahathir Mohamad, rather than harp on about their own narrow selfish
interests.”
