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KUALA LUMPUR — The Malaysian government’s recent announcement to impose higher passenger service charges at Kuala Lumpur International Airport 2 or KLIA2 from January has been met with brickbats from several quarters.
PSC are aeronautical charges levied on departing passengers at all international airports, as part of flight fares. AirAsia, which uses the budget airline terminal as its regional base, is up in arms over the move to bring KLIA2 in line with taxes charged at the main KLIA terminal used by full-service carriers to 73 ringgit ($17.90) for each outward journey, from 50 ringgit now. PSC for domestic flights are 11 ringgit each.
“How can anyone say KLIA and KLIA2 [are] the same? Beyond logic,” wrote Tony Fernandes, AirAsia group CEO in a Facebook posting recently.
Tony Pua, an opposition lawmaker, also wants the government to reconsider the decision, which he saw as penalizing KLIA2 passengers given that there would not be a corresponding increase in the quality of facilities and services. Other critics of the plan said that the move could erode Malaysia’s competitiveness as the regional hub for low-cost carriers and lead to a fall in tourist arrivals.
For AirAsia, any increase in total airfare could mean losing customers to competitors based at KLIA. But the government will have to fork out 60 million ringgit in subsidies if it did not raise charges at KLIA2, said Abdullah Ahmad, executive chairman of the Malaysian Aviation Commission (MAVCOM) in an interview with the New Straits Times over the weekend.
MAVCOM, which was only set up in March 2016 to oversee commercial operations at airports and consumer rights, said it needed to “level [the] playing field” between both terminals. PSC for domestic travel and destinations in the 10-member countries in the Association of Southeast Asian Nations were already raised at the start of this year at both terminals, which are 2 kilometers apart. But the last time that Malaysia conducted a wide review of the PSC was in 2011.
Poor service
KLIA2, which opened in May 2014 was built with budget airlines in mind, providing basic facilities compared with KLIA. It does not offer the aerotrain service that KLIA does to move passengers between immigration and flight gates and also wider check-in counters. Travelers sometimes have to walk 20 minutes from the terminal’s main entrance to flight gates.
Some customers also think the move is unfair. “This is totally ridiculous. Paying the same rate of a premium terminal at a low-cost airport,” said one comment on Facebook about the hike. “KLIA2 … where baggage checks are slow and queues are long,” said another.
Malaysia Airports, the operator of KLIA and KLIA2 defended the hike, saying that KLIA2 was a not low-cost terminal but a second permanent terminal for KLIA. This despite its 2014 slogan that called KLIA2 the “world’s largest purpose-built terminal for low-cost carriers.” In a statement on Monday, the state-controlled operator said Malaysia’s PSC rate was already among the lowest in the region.
In 2016, 27 million passengers used KLIA2, compared with 25.5 million for KLIA.
In a sign of how thin the margins are in the low-cost sector, Maybank Investment Bank said that AirAsia, which carried 26.4 million passengers as a group and is the lowest unit cost airline in the world, could face a hit of 25 million ringgit annually if fuel prices moved up by just a dollar.
In the run-up to a general election that must be held by next August, the timing of the hike could also be disastrous to the ruling party, analysts said.
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