MATTA: Hiking up PSC will hit klia’s competitive edge

PETALING JAYA: The move to raise the passenger service charge (PSC) at the Kuala Lumpur International Airport 2 (klia2) will affect its competitiveness and growth, the Malaysian Association of Tour and Travel Agents (MATTA) said today.

Its president, Tan Kok Liang, said the authorities’ reasoning that the current rate is the lowest in the world is akin to telling local businesses to charge higher because their products are cheaper.

He said it was the lower prices that made Malaysia competitive and attracted visitors from around the world, including from neighbouring Asean countries.

“Equalising PSC at klia2 with KLIA will affect the growth of cost-conscious and budget passengers travelling in low-cost carriers. They are particularly sensitive to price hikes,” he said.

“Both terminals were built with vastly different facilities to cater to different market segments.

“The PSC cost structure should not be based on a ‘one-size fits all’ approach,” he added in a statement.

Malaysia Airports Holdings Bhd (MAHB) had supported the decision of the Malaysian Aviation Commission (Mavcom) to equalise the PSC rate for international destinations from Malaysian airports, including klia2, at RM73 from Jan 1.

Currently, the PSC rate applicable at klia2 for non-Asean international destinations is RM50.

Mavcom had claimed the PSC between klia2 and KLIA should be the same as the two airports provided a similar quality of service. It stated that klia2 was never designed as a low-cost carrier terminal.

This was met with stinging criticism from AirAsia Group CEO Tony Fernandes who said Malaysia needed a low-cost airport with a different PSC to allow everyone to have a chance to fly.

Tan said raising the rate would disadvantage klia2, where passengers had to walk a long distance, suffer congested spaces and use travelators that were not level with the floor.

He said long queues at the immigration counters during peak periods resulted in waiting time of 30 minutes or more at klia2.

Tan refuted Mavcom’s claim that it was unsustainable for klia2 to keep the low-cost carrier terminal (LCCT) PSC rate at RM50 for non-Asean international destinations.

He said MAHB registered earnings of RM1,709.9 million before tax, depreciation and amortisation in 2016, representing a growth of 1.8% according to its financial reports.

He said klia2, with a huge shopping mall, had plenty of non-aeronautical revenue to rely on instead of taxing passengers.

He said the PSC should be based on the principles of the International Civil Aviation Organisation (ICAO) and International Air Transport Association (IATA).

These encouraged formulation of charges, based on engagement with airline operators to develop the best solution.

They also encouraged benchmarking of facilities and service levels, and taking into account non-aeronautical revenue such as rental income, he added.