IT is not sustainable for the Kuala Lumpur International Airport 2 (klia2) to stick to the passenger service charge (PSC) rates of the old Low-Cost Carrier Terminal (LCCT) as the new airport is more advanced and more costly to run, the Malaysian Aviation Commission (Mavcom) said today.

A Mavcom spokesman told The Malaysian Insight that until this year, PSC rates, formerly known as airport tax, had been stagnant since 2011.

“This meant that the airports were operating on rates set before the existence of klia2, back when the LCCT was still in use (in 2006).

Mavcom said that when klia2 opened, it imposed the same PSC rates as the LCCT, which was unsustainable given the cost of operating and maintaining a more advanced airport.

“Understandably, LCCT’s PSC rates were lower compared with other airports given that its facilities were far less advanced, and it had a much lower capacity.

“However, when klia2 began operations, it had the same PSC rates as the LCCT, despite having far superior services and facilities.

“This environment is non-sustainable, given that the costs of operating and maintaining a larger and more advanced airport are higher. 

“Such a non-sustainable environment would not bode well for the sector,” the spokesman said in response to questions from The Malaysian Insight.

Beginning January 1 next year, the PSC for all international destinations from any Malaysian airport will be RM73. Currently, it is RM50 for non-Asean international destinations from klia2 and RM73 from other airports.

On January 1 this year, the PSC rates for international destinations had increased from RM65 to RM73 in KLIA and other airports and from RM32 to RM50 in klia2.

AirAsia Group chief executive officer Tony Fernandes had said that the new PSC rates would make it harder for everyone to fly.

Mavcom reiterated that klia2 was never designed as a low-cost carrier terminal and was not a “hybrid airport” as some claimed.

That is why the disparity in PSC rates is “not justifiable” given that “klia2 has considerably more advanced facilities and services”,” its spokesman said.

“As a matter of fact, compared to other international airports in Malaysia such as Penang, Langkawi, Kota Kinabalu, Senai, etc., klia2 is undeniably a sophisticated, modern and well-appointed airport.”

No impact on air travel

Mavcom said even though the PSC rate was revised upwards at the beginning of the year, passenger traffic had increased, which proved that the tax had not affected air travel growth.

“We have noted that Malaysia’s air passenger traffic has increased year-on-year by 8.9% as of November 2017.

“This is a clear indicator that the PSC revision which took effect in January 2017 has not negatively impacted air travel growth in any way,” said the Mavcom spokesman.

The PSC will replace government subsidies for the operation and maintenance of the airport.

“Under the operating agreement between Malaysia Airport Holdings Berhad (MAHB) and the government of Malaysia, the government is required to pay a subsidy to MAHB for klia2’s operating costs.

“This subsidy would effectively be eliminated as a result of the PSC equalisation, meaning the funds could be better allocated to strengthening the sector and nation, such as rural air services in Sabah and Sarawak, or to promote tourism.”

The spokesman said the PSC equalisation would only affect long-haul flights out of klia2.

“To clarify, this equalisation will only affect the segment of passengers on long-haul flights out of klia2, which amounts to only 4.4% of the total number of travellers flying out of Malaysia.” – December 19, 2017.