Kuala Lumpur air tax changes welcomed

Kuala Lumpur air tax changes welcomed

Passenger service charges for flights between Malaysian capital Kuala Lumpur and other countries in south east Asia have been reduced, making it cheaper to fly between the city and the rest of the region.

But charges – the equivalent of the UK’s Air Passenger Duty - for other international flights have gone up. The new rates, set by The Malaysian Aviation Commission (MAVCOM), mean Malaysia’s PSC remains among the lowest in the world.

The charge between members of the ASEAN community dropped from RM65 to RM35 at Kuala Lumpur International Airport (KLIA) – a 46% fall - but have gone up slightly from RM32 to RM35 at the airport's second terminal KLIA2.

The “equalisation” move has been welcomed by airline Air Asia, which said the decision protects the interests of Malaysia after the country recorded a 6.2% drop in international visitor arrivals in 2014 and 2015.

“We have repeatedly said it is important to let tourist numbers return to previous highs before talking about increasing passenger service charges and we are pleased to know that our voices and opinion are being heard and considered,” said Aireen Omar, AirAsia Berhad chief executive in a joint statement with AirAsia X Berhad chief executive Benyamin Ismail.

MAVCOM said the revised rates, which come into effect on January 1, will create a “level playing field” between the two terminals.

But Air Asia also said it was “concerned” that the PSC for international flights has gone up, from RM65 to RM73 at KLIA and from RM32 to RM50 at KLIA2.

The joint statement added: “International passengers, most importantly from China, will now have to pay double the PSC. This may decrease the number of international tourists and eventually force us to put the capacity elsewhere.”

But MAVCOM said its international rates “remain competitive” and are lower than most Asian airports - such as those in Singapore and Bangkok - and international airports in Manila, Yangon, Phnom Penh, Delhi, Mumbai, Beijing, Shanghai, Hong Kong, Incheon, Tokyo, Osaka and Dubai.

“We are very focused on a long term and sustainable outcome,” said General Tan Sri Dato' Sri Abdullah Ahmad, executive chairman of MAVCOM.

“Our work on the PSC review aims to safeguard consumer interests, promote fair competition and ensure the airport operators continue to enhance their service levels.”

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