Jump to content
MalaysianWings - Malaysia's Premier Aviation Portal
Sign in to follow this  
Craig

New Passenger Levy Beginning June 2019

Recommended Posts

Buried somewhere in Malaysia's 2019 Budget is a proposed new international air passenger levy beginning 01 June 2019.

 

Proposed levy:

- RM20 for travel to ASEAN countries

- RM50 for travel beyond ASEAN countries

 

This is in addition to the PSC of RM11 for domestic travel, RM35 for ASEAN travel, and RM73 for beyond ASEAN flights.

 

PSC is charged based on the destination of your first outbound flight from Malaysia regardless of final destination (e.g. KUL-BKK-HKG on TG will incur RM35 PSC instead of RM73).

Share this post


Link to post
Share on other sites

So in layman's term, my airport tax to Heathrow from KLIA will be RM123.

 

On the reverse side, the Heathrow airport tax to KLIA now is £123.

 

Strange coincident.

 

Both exhibits above are assuming I am flying non-stop with MH and BA only.

 

I wonder if they realise that they are giving other ASEAN airlines (especially TG and SQ) an advantage over Malaysian carriers.

 

Good observation.

Share this post


Link to post
Share on other sites

This is Malaysia's version of the UK's APD.


I wonder if they realise that they are giving other ASEAN airlines (especially TG and SQ) an advantage over Malaysian carriers.

 

Yes, but both Thai and Singapore airports already charge more than Malaysian airports - so Malaysia is catching up. But as a proportion of total airfares to and from Malaysia, the UK's taxes and APD are probably the highest.

Share this post


Link to post
Share on other sites

 

Yes, but both Thai and Singapore airports already charge more than Malaysian airports - so Malaysia is catching up. But as a proportion of total airfares to and from Malaysia, the UK's taxes and APD are probably the highest.

A traveller who flies KUL-SIN/BKK-TYO (for instance) will end up paying less airport taxes than KUL-TYO direct. Departure taxes of BKK/SIN are irrelevant if one isn't doing a stopover.

Share this post


Link to post
Share on other sites

A traveller who flies KUL-SIN/BKK-TYO (for instance) will end up paying less airport taxes than KUL-TYO direct. Departure taxes of BKK/SIN are irrelevant if one isn't doing a stopover.

I think it affects airline yields more than the pax - afterall, pax only look at the bottom line fare they have to pay. Australian airports have very high taxes and fees compared to, say, Japanese airports - the airlines automatically adjust their fares to compensate for that. The UK APD also does not seem to affect their traveller numbers that much. Anyway, lets see what happens next year.

Share this post


Link to post
Share on other sites

I wonder if they realise that they are giving other ASEAN airlines (especially TG and SQ) an advantage over Malaysian carriers.

 

Think Singapore also recently introduced a new tax to fund T5?

Share this post


Link to post
Share on other sites

During the budget announcements and report, the finance mnister said there be a exit tax for malaysians. Didnt know if its built into the airport tax, then it be for all incl foreigners? Some clarifications needed. Similiarly like some countries like for example Indonesia there's a tax for indonesians leaving the airport and not foreigners.

Share this post


Link to post
Share on other sites

This new levy is not the same as PSC. PSC goes to MAHB whilst if I'm not mistaken, this levy will go straight to government.

Yes, it appears to be a revenue collection exercise for the govt. - similar to APD.

Think Singapore also recently introduced a new tax to fund T5?

And HKG is also collecting for third runway construction ...

Share this post


Link to post
Share on other sites

During the budget announcements and report, the finance mnister said there be a exit tax for malaysians. Didnt know if its built into the airport tax, then it be for all incl foreigners? Some clarifications needed. Similiarly like some countries like for example Indonesia there's a tax for indonesians leaving the airport and not foreigners.

 

Pretty sure it's non-discriminatory and applies to all pax. Most pax won't notice/see the charges (unless one goes through each line of taxes). I don't think Indonesia exit tax exist anymore (at least it's included in the ticket now).

 

Some countries like Mexico charges MXP 500 (~RM100) for all tickets to Mexico (e.g., even with the same fare, a MEX-LAX RT is 500 MXP cheaper than a LAX-MEX RT). This arrival tax is refundable for all Mexican citizens/residents but they have to actively request the refund from the airline since it's included in the ticket.

Share this post


Link to post
Share on other sites

i was thinking about if you could afford to purchase a ticket to fly, is RM20 or RM50 too much to pay for?

 

One can argue the same for the PSC, but yet people were making a ton of noise about it.

 

With this, you're paying PSC + tax. So it's not merely RM 20/RM 50.

Edited by Mohd Suhaimi Fariz

Share this post


Link to post
Share on other sites

 

One can argue the same for the PSC, but yet people were making a ton of noise about it.

 

With this, you're paying PSC + tax. So it's not merely RM 20/RM50

the statement still back to the basic actually, i don't believe an additional will be enough to deter people from travelling. as simple as it is. Yeah, they make noise about it and end of the days airport still chalking up passenger growth year over year. I think such move is good in order to increase revenue for the government (so long they use it the right way)

Share this post


Link to post
Share on other sites

So I believe the exit tax is only applicable for pax leaving via air, not for other transport mode such as land or sea ?

sounds like it, because it is mention about "airport exit tax". simply because it is the simplest way to collect revenue in an effective manner. small effort, huge money.

Share this post


Link to post
Share on other sites

Yes Thai market is bigger n more vibrant. AirAsia is also sending message to MAHB that its growth in KUL is dependent on low fares and airport charges/taxes.

Share this post


Link to post
Share on other sites

AirAsia is also sending message to MAHB that its growth in KUL is dependent on low fares and airport charges/taxes.

There's only so much that low airport taxes can accomplish. We can set our PSC at RM1 but that won't make the Malaysian market more attractive than Thailand's.

Share this post


Link to post
Share on other sites

There's only so much that low airport taxes can accomplish. We can set our PSC at RM1 but that won't make the Malaysian market more attractive than Thailand's.

Its not just the taxes - it is also the airport charges. The airport charges are more significant because they make up part of the operating costs for the airline. Also klia2 operations aren't exactly going like clockwork - many unscheduled runway closures to repair potholes, aprons that are flooded or being dug up, etc.

 

BTW, the A339s that are going to Thai Airasia X are the ones not taken up by WOW. I wonder if they got a little extra discount for those frames?

Share this post


Link to post
Share on other sites

Yes Thai market is bigger n more vibrant. AirAsia is also sending message to MAHB that its growth in KUL is dependent on low fares and airport charges/taxes.

Funny that you brought up airport charges/taxes to the passengers (we aren't privy to airline charges, so we shall leave that out).

 

Current Thai (both DMK/BKK) departure taxes:

APS: THB 35

International Arrival/Departure Fee: THB 15

PSC: THB 700

Total: THB 750 (~MYR 96)

 

Current Malaysia departure taxes:

PSC: MYR 73

Regulatory Charge: MYR 1

Total: MYR 74 (Plus MYR 3 KLIA2 fee, whatever that is for KLIA2 departures)

 

Again, still cheaper than Thailand. Is the MYR 23 increase in PSC for flights outside ASEAN going to impact passenger growth that much? That's a drop in the bucket for almost all passengers traveling out of ASEAN.

 

Echoing what Chris said, zero landing fees, zero PSC etc. won't entice an airline if there aren't any demand :)

 

What kind of entitled airline thinks their passengers should pay a different fee operating at a different terminal in the same airport? They are operating from an airport that serves almost exclusively LCCs in Bangkok but hasn't made a single complaint (at least publicly) about the high cost for passengers there!

Edited by Craig

Share this post


Link to post
Share on other sites

What kind of entitled airline thinks their passengers should pay a different fee operating at a different terminal in the same airport? They are operating from an airport that serves almost exclusively LCCs in Bangkok but hasn't made a single complaint (at least publicly) about the high cost for passengers there!

DMK has been designated as an LCC hub by the Thai govt. and CGK T2 is now also an LCC terminal.

 

Comparing DMK charges to klia2 charges isn't exactly correct because the market conditions at both airports are different. What we do know is that in Malaysia, the market is very price sensitive. So every RM added to the bottom line pax need to pay will affect demand negatively.

 

I think the Airasia Group were creative in their revenue model and they are one again refining that model with more emphasis on being a digital company. If they were to solely depend on aviation sources for its revenue, they might have packed up sometime ago, when oil prices were above USD 100.

Share this post


Link to post
Share on other sites

DMK has been designated as an LCC hub by the Thai govt. and CGK T2 is now also an LCC terminal.

 

Comparing DMK charges to klia2 charges isn't exactly correct because the market conditions at both airports are different. What we do know is that in Malaysia, the market is very price sensitive. So every RM added to the bottom line pax need to pay will affect demand negatively.

Again, the extra MYR 23 for passengers departing out of ASEAN isn't going to burn a hole in the pax's pocket. It's USD $5.50 - probably the cost of a two single public transit ticket in most foreign cities served by AK/D7 (with the exception of South Asia).

 

Passengers do not see how much taxes are paid - they just see the total amount that they need to pay. AK Group is throwing a fit because they were entitled to a lower PSC previously at LCCT, thus the total cost to their pax is lower and have a competitive advantage over others at the same base fare. And now they are suddenly equal to the likes of MH/SQ/TG etc. Kinda feels oppressive doesn't it, when you have all the privileges and equality comes knocking?

Edited by Craig

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...