Thursday, December 1, 2011

Tony Fernandes Declares War On Malaysia Airports

It smells fowl and i sense it coming from the government!

KUALA LUMPUR, Dec 1 — Hot on the heels of lambasting Malaysia Airports over the cost of KLIA2, Tan Sri Tony Fernandes vowed yesterday to fight the government-linked company over the recent 28 per cent airport tax increase.

AirAsia also kicked off an anti-tax hike campaign and many of its customers received emails yesterday asking them to “say NO” to the tax hike for international flights that takes effect today.

“AirAsia views that this increase is not justified as the current airport facilities are not up to par,” read the email. “Let MAHB (Malaysia Airports) know what you think about this Airport Tax Increase. Have your say today.”

AirAsia also gave out the email of MAHB’s managing director, Tan Sri Bashir Ahmad.
The airport tax, also known as passenger service charges, is collected by AirAsia from its customers and subsequently paid to MAHB.

Fernandes, AirAsia’s CEO, made an emotional appeal on Twitter last night, beginning with the airline’s origins and concluding with a battle cry.

“To all Malaysians. AirAsia has made flying affordable for all. Before it was just for the rich. We won’t allow Malaysia Airports to keep wasting money and increase charges for you. We will fight. Our campaign starts tomorrow,” he tweeted.

Airport taxes and fees are regulated by the Transport Ministry, and it recently gave MAHB the green light in to raise passenger service charges by 28 per cent and aircraft parking and landing charges by nine and 18 per cent respectively over three years. Following the Transport Ministry’s decision, AirAsia questioned whether the increases were justified based on the quality of the airport terminals.

MAHB, on the other hand, argued that its airport charges are already the lowest in the region.
The next review by the government is due in 2014.

Airport taxes at Penang, Kuching and Langkawi will rise from RM51 to RM65, while the low cost carrier terminals (LCCTs) at KLIA and Kota Kinabalu will go from RM25 to RM32.

An agreement signed between MAHB and the Transport Ministry in February 2009 set a benchmark airport tax rate of RM65, excluding the low cost carrier terminal (LCCTs), and the government compensates MAHB for the difference.

The compensation at Penang, Kuching and Langkawi will now cease given that airport taxes have hit the pre-agreed rate of RM65.

MAHB will also see an increase in revenue from the additional RM7 tax levied at the LCCTs in KLIA and Kota Kinabalu, with analysts expecting the higher taxes to boost the airport operator’s earnings by up to eight per cent next year.

Fernades also told The Malaysian Insider on Tuesday he doubted MAHB’s assurances that the higher price tag for the new low cost carrier terminal, KLIA2, which roughly doubled due to bigger and better specifications, will not result in higher passenger fees and other airport related charges, adding he lost faith in the airport operator after it allegedly failed to live up to a previous “guarantee” to not increase airport taxes.

MAHB, however, maintained that return on investment on KLIA2 will not come from airport taxes but from non-aeronautical revenue such as retail.

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