Collecting less airport tax affects government revenue, says MAHB

Bernama pic.

PETALING JAYA: The country’s main airports operator says any failure to collect the gazetted passenger service charge (PSC) of RM73 will ultimately affect the federal government’s revenue, following confirmation by AirAsia that the budget airline is collecting only RM50.

Speaking to FMT, Malaysia Airports Holdings Bhd (MAHB) acting group CEO Raja Azmi Raja Nazuddin said this was because 11.8% of MAHB’s revenue went to the government as part of the user fee it paid to Putrajaya.

Raja Azmi Raja Nazuddin.

Raja Azmi said the PSC was determined by the government and applicable to all airlines.

He was commenting on AirAsia chief executive Riad Asmat’s confirmation that the airline was only collecting RM50 in PSC, in defiance of the government gazette mandating a collection of RM73 from each passenger flying to a destination outside Asean.

This earned the airline criticism from the Board of Airline Representatives Malaysia and former Malaysia Airlines chief executive Abdul Aziz Rahman, who said it was unfair to other airlines.

Raja Azmi said for MAHB, the unequal collection of PSC affected its revenue to the tune of RM100 million per year.

“If airlines want to subsidise their passengers, they can opt to do so through their fares.

“The PSC was gazetted as a fixed rate, hence lowering the PSC is not an option. Similarly, when the PSC for non-Asean was reduced to RM35, it was also implemented as gazetted without question.”

Raja Azmi also said the increase in PSC in February this year to RM73 – still among the lowest in the region, he added – was necessary to improve airport facilities.

He cited the recent instalment of 30 self-baggage drop counters at klia2, which improved passenger processing time to less than a minute from 2.5 minutes before.

Raja Azmi said the improved level of service could be seen in Mavcom’s quality of service framework scores in which both KLIA and klia2 met or exceeded all targets set.

Despite the increase in PSC over the years, he added, the compounded annual growth rate for Malaysia’s passenger traffic over 10 years was 6.5%.

“This shows the continued growth of travel despite the PSC increment,” he said, adding that 70% of PSC collected for international non-Asean travel at klia2 was from foreigners who paid much higher PSC in their own countries.

Raja Azmi said the same could be seen at an international level in countries like Thailand and Singapore.

“In Thailand, the PSC is the same at the Suvarnabhumi International Airport and the Don Mueang International Airport, which is a low-cost hub, and they are enjoying double-digit growth.

“In Singapore, they increased the PSC at Changi by SG$13 this year from SG$34 and they haven’t experienced any decline in passenger traffic.”

Changi’s PSC is equalised for all four of its terminals.