PUTRAJAYA will subsidise the passenger service charge (PSC) for air travellers should the Malaysian Aviation Commission’s (Mavcom) review decide on rates higher than those set by the cabinet, said sources.

Putrajaya will use the fees it collects from airport-user operators to subsidise any increase in rates imposed by Mavcom, sources told The Malaysian Insight.

Transport Minister Anthony Loke said the PSC for flights to destinations beyond Asean, departing from hubs other than Kuala Lumpur International Airport, has been set at RM50.  

The rates for flights to Asean countries and domestic destinations remain at RM35 and RM11, respectively.

Mavcom is conducting a review of airport aeronautical charges, including the PSC, and will announce the new rates in the coming weeks.

A government source told The Malaysian Insight even if the commission decides on a PSC rate higher than the RM50 set by the cabinet, travellers need not pay more as the difference will be covered using fees collected from, among others, Malaysia Airports Holdings Bhd (MAHB) and the MMC Group, which operates Senai International Airport.

“It is up to them (Mavcom) if they want to set a higher rate. If that’s the case, the government will pay the difference.

“For example, if Mavcom sets the PSC for non-Asean flights departing from Penang International Airport at RM60, only RM50 will be collected from each passenger. The remaining RM10 will be paid using the fees collected from airport operators.”

Should Mavcom increase the PSC rate for KLIA, the same mechanism will apply, added the source.

The cabinet decided to keep the rate for international rate beyond Asean at RM73 for flights departing from the country’s main air hub.

Mavcom’s new rates will take effect next January, while those announced by Loke comes into force on October 1. From October until end of December, the cabinet rates will apply.

The commission must get the government’s approval before the revised rates can be gazetted for implementation, said the source.

A Mavcom spokesman recently told The Malaysian Insight that the new rates would be based on an airport’s size, services and facilities, and would be determined using the internationally accepted regulatory asset base (RAB) framework.

The RAB framework will “free the government from subsidising airport operations”, as is currently practised, said the commission on Friday.

Mavcom is responsible for determining aeronautical charges, such as the PSC and aircraft landing and parking fees, under Section 46 of the Malaysian Aviation Commission Act 2015.

The PSC is collected by airport operators.

MAHB, which operates 39 airports nationwide, collected RM1.38 billion in PSC fees last year.

“In the past, (MAHB) provided the government between RM300 million and RM400 million per annum as user fees under the PSC regime,” it said recently.

“In 2018, the user fees (paid to the government) stood at RM417.6 million and in 2017, it was RM391.8 million.” – September 1, 2019.