Increasing airport tax removes incentive for foreigners to use klia2

passenger-service-chargeBy CY Ming

It is the normal practice for airports around the world to levy the passenger service charge (PSC), also known as airport tax.

But there is no PSC at train or bus stations. Why the discrepancy?

Would it be better for airports to abolish airport tax, or train and bus stations to introduce PSC?

Introducing PSC would certainly be abhorred by train and bus passengers, but the rationale for charging is the same as for airports.

Although most train stations are used by few rail operators, major bus stations are similar to airports, with many operators paying fees levied by the management.

If charging bus passengers for PSC at the Terminal Bersepadu Selatan in Tasik Selatan, Kuala Lumpur, is unthinkable, so is equalising PSC at klia2 with KLIA.

After all, the long-distance bus terminal in Kuala Lumpur also cost millions of ringgit to build.

Malaysians are fond of thronging shopping malls, especially over weekends and holidays, to enjoy the cool comfort and for window-shopping or just spending time, because they is no entry fee as malls managements rely solely on rental from tenants for income.

This is not lost on rail operators, as many stations incorporate shopping facilities and earn rental income from tenants.

Malaysia Airports Holdings Berhad (MAHB) went all out to design a huge shopping mall at klia2, located between the entrance right up to departure gates.

It was a clever way to derive additional income, similar to rail operators earning rental income from retail outlets to keep train fares low.

From Jan 1 next year, the PSC rate for all international destinations from any Malaysian airport will be RM73. Currently, the PSC rate applicable for non-Asean international destinations from klia2 is RM50.

Increasing PSC at klia2, intended to replace the initial low-cost carrier terminal, which was bursting at its seams, leaves a sour taste in the mouth.

MAHB managing director Badlisham Ghazali said foreign passengers account for 75% of international departures at klia2 against 25% of Malaysians.

But this is no consolation as the 25% represents a large number of Malaysians and getting rid of the incentive for foreigners to fly through klia2 would result in fewer visitors to Malaysia.

The number of visitors to Malaysia has not increased since 2014 when about 27.4 million came to our shores. In 2015, it was around 25.7 million and last year 26.7 million.

The number of visitors for this year is expected to be back to the 2015 figure.

Extra efforts should be made to woo visitors. Replacing the low-cost carrier terminal, which was instrumental in turning the international airport into a major budget carrier hub, is not one of them.

Badlisham also said “if the services and facilities at klia2 are not comparable with KLIA, why then do international passengers feel that airport facilities in Penang, Kota Kinabalu, Kuching, Langkawi and Senai are different from that of klia2 but they have to pay the same charges?”

Passengers travelling through klia2 will not buy the reasons dished out for equalising the PSC with KLIA.

But they can only protest in vain. They have no option but to cough out whatever PSC is imposed on them, unlike customers of shopping malls.

CY Ming is an FMT reader.

The views expressed are those of the author and do not necessarily reflect those of FMT.

http://www.freemalaysiatoday.com/category/nation/2017/12/23/govt-psc-rates-wont-affect-international-tourist-arrivals/

http://www.freemalaysiatoday.com/category/nation/2017/12/18/mahb-klia2-a-second-terminal-of-klia-not-budget-airport/

http://www.freemalaysiatoday.com/category/nation/2017/11/30/passenger-services-charges-fully-equalised-from-jan-1/

http://www.freemalaysiatoday.com/category/nation/2017/12/22/tony-puas-remarks-on-psc-hike-a-blatant-lie-says-see-to/