‘ No impact on airfares if SST is same as before’
> Malaysia Airlines still awaiting guidance from Transport Ministry and Mavcom on ceiling prices, says CEO
PETALING JAYA: Malaysia Airlines Bhd (MAB), which is waiting for guidance from the government and the Royal Malaysian Customs Department on the scope of the Sales and Services Tax (SST) on airfares, said there is unlikely to be an impact on airfares should the tax regime remain the same as the previous SST.
Group CEO Captain Izham Ismail said that the airline was not subjected to the previous SST, which was scratched to pave way for the Goods and Services Tax (GST).
Similarly, he said, the airline is awaiting guidance from the Transport Ministry and the Malaysian Aviation Commission (Mavcom) on the ceiling price for airfares, which Transport Minister Anthony Loke said will be finalised by month-end.
Noting that ticket prices are market driven, he hopes for a dialogue session to be held with the commission before a decision is made.
Meanwhile, in response to a report on MAB tapping banks to fund the purchase of some nine Boeing 737 MAX planes, Izham said the group is “evaluating” financing options. The jets have a list price of around US$1 billion (RM4 billion).
“To us it is a normal course of business. MAB is evaluating options, whether we fund it ourselves or we go through financing or lease buyback.
“We have confirmed order for 25 B737 Max which was inked two years ago. And we have another option of 25 which we have not exercised yet,” he said after a signing ceremony between MAB and four tour operators yesterday.
The national carrier entered into a charter service deal with a coalition of four umrah tour operators comprising KRS Travel Sdn Bhd, ATS Global Travel & Charter, Ecoriths Leisure Travel & Tour and Rayhar Travels Sdn Bhd to provide air charter services during the umrah season beginning October 2018 until June 2019.
MAB is aiming to tap into 50% of the umrah pilgrimage market in Malaysia and Indonesia. A total of 270,000 to 290,000 umrah pilgrims are projected to make their pilgrimage to the holy land in the upcoming pilgrimage season.
Izham said all the 149 flights will be operated via its Airbus A380-800 aircraft, transporting 70,000 pilgrims from Malaysia and neighbouring countries such as Indonesia. The direct flights are from Kuala Lumpur to Jeddah and Madinah in Saudi Arabia.
MAB is also looking to tie-up with some of the over 200 umrah tour operators in Indonesia.
On another note, Izham noted that resuming the Istanbul route is one of its future plans which has not been cast onto stone. This, he said, could be a possibility once the aviation group is in a more stable footing.