Malaysia Airports Clarifies (1)
Kuala Lumpur, 20 January 2009
Malaysia Airports Holdings Berhad (MAHB) has noted that additional comments have been made whereby we are duty bound to provide clarification.
- Aeronautical charges, or commonly known as 'Airport Charges,' which are approved by the government can be divided into two categories:
- Passenger Service Charge (PSC) (formerly known as 'Airport Tax') which is paid by departing passengers.
- Charges to the airlines which includes parking, landing, aerobridge and check in counters.
- The level of aeronautical charges are determined and approved by the Government authorities and are applied on a standard basis across all airports in Malaysia. Any increases or decreases in these charges are within the purview of the Government authorities and MAHB fully respects this, as can be seen in the case of the current LCCT, where the Government reduced the PSCs.
- It has been contended that the higher the cost of building a terminal, or for that matter, an airport, will result in higher charges to airlines operating into that particular airport. This is not the case. For example, when KLIA was built and the airlines moved from Subang, aeronautical charges at KLIA were not increased; similarly, the case for Langkawi, Kota Bharu, Alor Setar, Bintulu, Tawau and Limbang Airports. This will therefore also not be the case for newly upgraded airports in Kuala Terengganu, Melaka, Labuan, Kuching and Kota Kinabalu. Any increase is applied uniformly across all airports.
- Charges paid by airlines at Malaysia's airports are already low and discounted against those charged by neighbouring competing airports. These charges are intentionally kept low to provide low cost operations for airlines operating in and to Malaysia. Therefore, the issue of high aeronautical charges applicable to airlines does not arise.
- In fact, it needs to be emphasised that the landing and parking charges in Malaysia have not been increased for the past 27 years.
- Airport charges applicable to airlines constitute only a small proportion of their total costs. For example, in the case of AirAsia, it is believed that this constitutes approximately only 2.5 percent of their total annual costs. When incentives are given, this percentage is further reduced.
- When the current LCCT was being designed, AirAsia stated that their business model was strictly on a point-to-point basis. This meant that it did not involve, nor catered for transfer of passengers even between its own flights at the LCCT. This low cost model meant that passengers who wished to transfer flights were expected to take out their own bags by themselves and re-check in all over again.
- During the design stages of the current LCCT, MAHB had advised for the LCCT to have transfer facilities. However, AirAsia made it very clear that this was not required under their business model.
- In order to provide connectivity between LCCT and the main terminal, MAHB had offered to provide airside bussing services for passengers, if AirAsia as the ground-handling agent could provide baggage transfers. Transfers via KLIA's airside would then take less than ten minutes. AirAsia was unable to accommodate this proposal. As such, passengers have to use public transportation to go to the main terminal from LCCT and vice versa, should they wish to transfer flights between the two terminals.
- However, AirAsia only recently changed their business model to allow for transfer of passengers, including interlining of baggage between AirAsia and AirAsia X flights. In the expansion works currently being carried out at the current LCCT, facilities are being incorporated to facilitate such transfer of baggage.