RAISING the passenger service charge (PSC) in 2017 did not affect air travel, said Malaysia Airports Holdings Bhd (MAHB), adding that there were more passengers.

The airport operator also made RM1.38 billion last year from the levy, it said in a statement issued to The Malaysian Insight.

Of the amount collected from the levy, RM417.6 million was paid to the government.

MAHB saw 2.5% growth in passenger traffic to 99.03 million in 2018, from 96.64 million in 2017.

“This indicates that the PSC levels imposed in Malaysia have had no negative effect on air travel,” MAHB said.

“Malaysia Airports recognised revenue of approximately RM1.38 billion (last year) from PSC for its Malaysian operations.

“PSC is paid by passengers and represents a small component compared to the overall airfare price,” it said.

The Malaysian Insight asked MAHB about the amount of PSC collected and what the charge was used for, as the levy has been hotly disputed by low-cost carrier AirAsia.

AirAsia refused to collect a portion of the PSC after it was raised last year to RM73 for non-Asean international flights.

The budget airline insisted that services and facilities at klia2 are sub-standard and passengers should not be charged the same rate as the main airport, KLIA. AirAsia had only been collecting RM50 per passenger instead of the full charge.

After a suit by MAHB against the budget airlines and a court ruling in July, AirAsia began charging the full PSC rate of RM73 for non-Asean international departures earlier this month.

MAHB said the PSC collected was a key source of revenue for the group, which allowed MAHB to ensure operational sustainability and as a revenue source for the government.

“In the past, Malaysia Airports has provided the Malaysian government between RM300 million and RM400 million per annum as user fees under the PSC regime.

“In 2018, the user fee (paid to the government) was RM417.6 million and in 2017, it was RM391.8 million.”

MAHB, which runs 39 airports, also uses the revenue to sustain operations at airports which are non-profitable, especially those necessary to ensure connectivity to remote areas. 

“The PSC collected from the selected few airports with high passenger traffic enables Malaysia Airports to continue fulfilling its social obligations to ensure that millions of Malaysians can continue to have air transport connectivity within Malaysia,” the statement said.

There had been two revisions of the PSC, with the first implemented on January 1, 2017 to standardise rates for flights out of KLIA and klia2.

The PSC for domestic flights was set at RM11, an increase from RM9 for KLIA and klia2.

International flights to Asean destinations were standardised at RM35 per passenger. This was a reduction for flights from KLIA, but RM3 increase for those departing from klia2.

For international flights to other non-Asean destinations, the PSC was set at RM50.

Last July, the Malaysian Aviation Commission (Mavcom), which sets the PSC rates, increased the levy for non-Asean international flights to RM73. 

While other airlines complied, AirAsia refused and continued to collect only RM50 until it was forced to by a high court ruling in July.

MAHB also said since 2009, it no longer subsidised the operations of Express Rail Link, which runs the KLIA Express and KLIA Transit trains. 

A 30-year concession agreement inked in 2002 required RM5 from the airport tax for each KLIA passenger to be paid to ERL, regardless of whether the passenger used the train service or not.

MAHB had paid RM5 per international passenger and RM1 per domestic traveller flying out of KLIA and klia2 to ERL.

As of 2016, the ERL’s net losses stood at RM661.34 million. – August 27, 2019.