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Malaysia could lose RM1.5 billion a year, warn aviation bodies

 | November 22, 2017

Two international aviation associations say international passenger traffic will drop if Malaysia were to impose new passenger charges to recover the cost of a new border management system.

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KUALA LUMPUR: Two aviation bodies said Malaysia could lose up to US$362 million (RM1,491 million) in revenue annually if it proceeds with its plan to impose a new charge on airline passengers.

The International Air Transport Association (IATA) and Association of Asia Pacific Airlines (AAPA) warned that Malaysia’s plan to introduce a new charge for international passengers to cover the cost of a new border management programme – the Advance Passenger Screening System (APSS) – would drive down tourist arrivals.

The APSS is an interactive Advanced Passenger Information (API) programme. The API has already been introduced in 65 other countries and allows authorities to receive passengers’ passport details electronically before international flights land or depart.

Theedgemarkets.com reported that, in a position paper issued today, IATA and AAPA said: “A large majority of the states with API programmes in place do not levy such charges and instead, have agreed to fund this through the general national budget.”

Saying the funding for API was a state responsibility as it was linked to border security and intelligence collection, they noted that International Civil Aviation Organisation Document 9082 explicitly said this expense should not be recovered through a charge.

They also said such a charge would have an adverse effect on Malaysia’s competitiveness and aviation sector.

If one passenger, for example, were to be charged US$8, they said, it would mean a decrease in international passenger traffic of around 2.8% annually, reducing the industry’s contribution to Malaysia’s gross domestic product by US$362 million.

Theedgemarkets.com quoted the two aviation bodies as saying the presence of a passenger charge would add to other tourist taxes and make travel to Malaysia significantly more costly for any visitor.

They also noted that airlines were already contributing to API by collecting, formatting and sending the data to the authorities, and training their staff. This, they said, represented a cost to the airlines.


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