Maintain Passenger Service Charge at KLIA2 – Matta
KUALA LUMPUR: The Malaysian Association of Tour and Travel Agents (Matta) president Datuk Tan Kok Liang disagrees with the Passenger Service Charge (PSC) hike at KLIA2 scheduled for implementation from January 1 next year.
Tan said: “We welcome the statement made by Minister of Transport, Datuk Seri Liow Tiong Lai, who acknowledged that a higher PSC would have an impact on many people, and the Ministry of Finance is looking into the appeal made by AirAsia.
“Giving the reason for increasing PSC just because it is among the lowest in the world is akin to telling local businesses to charge higher because their products are cheaper. But lower prices make us competitive and attract visitors from around the world, including neighbouring Asean countries.
“Equalising PSC at KLIA2 with KLIA will affect the growth of cost conscious and budget passengers travelling with low-cost carriers as they are particularly sensitive to price hikes. Both terminals were built with vastly different facilities to cater for different market segments. The PSC cost structure should not be based on ‘one-size fits all’ approach. Any increase in PSC is bound to have a material effect on demand.
“Imposing the same charge for different levels of facilities and services is discriminatory and unfair to air travellers. It also disadvantages KLIA2 to compete with KLIA on its full service facilities and equipment for the comfort and services.
“Passengers at KLIA2 have to walk 400 metres on the skybridge which is jam-packed with retail outlets, buggy movements and addon travelators to departure gates, compared to Aerotrain service to the satellite terminal at KLIA. The add-on travelators are not level with the floor and placed at odd locations, creating congestion due to narrowed walkways. Passengers arriving at KLIA2 could only exit after spending 1520 minutes walking long distances over multiple floor level changes.
“The immigration and customs facilities are different at these two terminals. Long queues at the immigration counters during peak periods resulting in 30 minutes or more waiting time are the norm at KLIA2, which also does not have a systematic border control like Passenger Reconciliation System (PRS) to safeguard airport security and airlines.
“Matta refutes claims by the Malaysian Aviation Commission (Mavcom) that it is unsustainable for KLIA2 to keep low-cost carrier terminal (LCCT) passenger service charge rates at RM50 for non-Asean international destinations, while Malaysia Airports Holdings Berhad (MAHB) registered earnings of RM1,709.9 million before interest, tax, depreciation and amortisation in 2016, representing a growth of 1.8% according to the MAHB latest financial reports.
“Instead of penalising passengers, Matta urges Mavcom to look into the other segments of the aeronautical and non-aeronautical revenue streams, and examine the cost structure of imposed fees on the airlines and airports. The goal is to reduce cost and stimulate the tourism sector, and to ensure greater comfort and convenience to air travellers.
“Further engagement and transparent discussions with airline operators, associations and other relevant industry players should be taken to strengthen the aviation sector and growth of the tourism industry.
“On the other hand, raising charges would make us less competitive and would be welcome by our competitors. Small wonder why the move to equalise PSC for international flights was welcomed by other countries and groups such as the International Civil Aviation Organisation (ICAO) and International Air Transport Association (IATA).
“Malaysia had been an envy in the region ever since a budget airline operating from an LCCT in Kuala Lumpur made flying affordable, allowing large numbers of people to travel and promoting tourism among the masses. Many other airlines and airports are trying to emulate and they will catch up sooner the faster LCCT is obliterated.
“Equalising PSC at KLIA2 with KLIA in January, along with many other higher prices to be introduced in 2018, are bound to spike inflation in our country. The Statistics Department disclosed the consumer price index for January to November 2017 increased by 3.9% compared with the previous corresponding period.
“According to the findings of Global Survey of Consumer Confidence and Spending Intentions by Nielsen, Malaysian consumer confidence slipped four spots to be 32nd most confident country globally in Q3 2017, from 28th place in the second quarter. The slide must be arrested.
“More than ever, we need to promote tourism and not impose higher charges on passengers, particularly those who are cost conscious and travel on budget airlines. As their numbers are large and combined spending huge, it is the best antidote to revitalise our country’s economy and boost confidence among the rakyat.
“Tourism has a chain effect on many other industries, and the benefits ripple across the country far better than the RM60 million the government has to spend if PSC is not raised at KLIA2”.
“At the end of the day, PSC should be based on ICAO and IATA principles, which encourage formulation of charges based on engagement with airline operators to develop the best solution; transparent justification for changes in any charges; benchmarking of facilities and service levels which vary according to airports; and non-aeronautical revenues, such as rental income, should be taken into account to offset the charges cost base.
“And KLIA2, with a huge shopping mall, has plenty of nonaeronautical revenue to rely on instead of taxing passengers,” concluded Tan.