AirAsia says MAHB refuses mediation over dispute

The Malaysian Aviation Commission Act 2015 requires MAHB and airline operators to mediate any dispute, with legal action only being used as a last resort when all other efforts have failed.

KUALA LUMPUR: AirAsia said today Malaysia Airports Holdings Berhad (MAHB) has rejected its offer to mediate a dispute over passenger service charges (PSC).

It said in a statement that the airport operator’s lawyers had sent it a letter refusing the mediation proposal.

AirAsia had proposed mediation to MAHB in an attempt to amicably resolve their dispute over PSC at klia2.

The Malaysian Aviation Commission (Mavcom) Act 2015 requires MAHB and airline operators to mediate any dispute. Legal action may only be used as a last resort when other efforts have failed.

AirAsia Malaysia CEO Riad Asmat said the company had acted in good faith by complying with the Mavcom Act.

“We regret that MAHB has refused AirAsia’s olive branch to resolve outstanding issues between us through mediation, particularly in light of MAHB’s recent statement that it is ‘optimistic that these matters can and will be resolved’.

“We will seek guidance from Mavcom on the next steps to address this situation. However, we reserve our rights to take all necessary actions to protect the interests of our guests and shareholders.”

The PSC in klia2 has been increased from RM50 to RM73 for non-Asean international passengers and from RM6 to RM11 for domestic passengers.

PSC is supposed to be collected by airlines from departing passengers upon purchase of their flight tickets. The money is later paid to MAHB.

AirAsia says the decision to impose the same PSC for KLIA and klia2 is fundamentally wrong and against the principle of non-discriminatory pricing. It has been collecting a lower PSC from its passengers than that fixed by MAHB.

MAHB says it does not set, fix or control PSC and that the PSC partially covers the operating, improvement and maintenance of its 39 airports around the country, including 18 smaller airports in rural areas where PSC is not imposed.

Following the disagreement, Malaysia Airports (Sepang) Sdn Bhd, a subsidiary of MAHB, filed civil suits against AirAsia for the outstanding PSC. AirAsia then served a notice on Malaysia Airports (Sepang) Sdn Bhd claiming almost RM480 million for losses incurred from operating at klia2.