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Airport Tax Will Increase

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PETALING JAYA (Aug 10, 2011): Air travel will cost more soon when airport tax, or passenger service charge, is raised from next month.

 

Sources said Malaysia Airports Holdings Bhd (MAHB) is raising the tax to cover rising operating costs and finance airport expansion.

 

It is understood that the airport operator has proposed that the tax at the country’s 39 airports it manages, excluding low cost carrier terminals (LCCTs), be raised by RM14 for international travellers from Sept 15. These travellers will have to pay RM65 from RM51 (RM45 for airport tax and RM6 for security charge) now.

 

The last increase was in 2002, when the charges were raised to RM45 from RM40 for international passengers and RM6 from RM5 for domestic departures.

 

According to sources, the tax at low-cost carrier terminals (LCCTs) in Sepang and the Kota Kinabalu International Airport will also likely be raised by RM7, bringing the airport tax to RM32 from the current RM25 for international passengers.

 

However, it is not known how much more domestic travellers at KLIA, other airports and LCCTs will have to fork out.

 

Sources said MAHB has received the go-ahead to implement the increase in airport tax. An announcement is expected soon.

 

At present, domestic passengers pay RM9 (RM6 for airport tax and RM3 for security charge) using KLIA and airports managed by MAHB while LCCTs charge RM6. In May 2007, the Transport Ministry halved airport tax at LCCTs from RM51 to RM25 for international passengers and from RM9 to RM6 for domestic passengers.

 

This latest development comes a day after Malaysia Airlines (MAS) and AirAsia announced a tie-up aimed at turning around the loss-making national carrier.

 

On Tuesday, Khazanah Nasional Bhd, which owns 69.5% in MAS, said it will take up a 10% stake in AirAsia, while Tune Air Sdn Bhd, which owns 23% in AirAsia, will hold a 20.5% stake in MAS.

 

Sources said the latest increase in airport tax is also part of an operating agreement signed between MAHB and the Transport Ministry in February 2009.

 

Under the deal, the government had agreed to a benchmark airport tax of RM65, excluding LCCTs. Until the tax was raised, the government has to compensate MAHB for the difference.

 

MAHB had said then that the practice better shields the company from policy decisions that may not be commercially viable.

 

For the first six months of the year, 31.24 million passengers used the 39 local airports MAHB manages, up 12.6% from 27.74 million in the same period last year.

 

KLIA saw 18.42 million passengers from January to June, a 13.4% increase from 16.25 million a year ago. The LCCT in Sepang handled 8.57 million passengers, up 19% from 7.21 million.

 

Source: http://www.thesundaily.my/news/108250

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I wonder what's driving them to raise all these taxes. Offer airlines to land for free, park for free and charge the passengers flying in? On another note, they also decided to increase the monthly parking fee for staffs working around the airport too! Greedy, very greedy indeed! :finger:

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On another note, they also decided to increase the monthly parking fee for staffs working around the airport too! Greedy, very greedy indeed! :finger:

How much is it now? Previously it was RM90/month at the MTB.

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How much is it now? Previously it was RM90/month at the MTB.

 

Price increase from 50-100% for uncovered parking & parking lots located almost a distance away from LCCT. It was RM40-60 previously, and now cost RM60-RM120.

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MAHB need the increased airport tax for their new HQ, changes demanded by AK on KLIA2, to advertise awards won by KLIA, KKIA, etc.

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KUALA LUMPUR, Aug 12 (Bernama) -- There is a high probability that the much talked about hike in airport tax could be suspended due to the possibility of changes to the management of Malaysia Airports Holdings Bhd (MAHB), OSK Research said.

 

"We understand that yesterday, AirAsia chief executive officer Tan Sri Tony Fernandes and the AirAsia-MAS collaboration exco met with MAHB managing director, Tan Sri Bashir Ahmad Abdul Majid.

 

"While we do not know what the discussions centered on, negotiations on passenger service charges may have been on the agenda.

 

Hence, there is a high probability that the rate hike could be suspended," said OSK in its research report Friday.

 

It was reported that MAHB would raise the airport tax on international passengers by RM14 to RM65 for all airports. For the low cost terminal, tax on international passengers will be increased by RM7 to RM32.

 

However, even if the higher airport tax for international passengers from KLIA and Kota Kinabalu's terminal is implemented, the move will have no upside impact on revenue and earnings for MAHB.

 

This is because the proposed RM14 increase to be collected from passengers under the new rates, is currently being subsidised by the government.

 

Hence, once the tax hike takes effect, MAHB will be collecting directly from the passengers.

 

However, the higher tax on international passengers departing from the low cost terminal and Kota Kinabalu airport could potentially lift earnings by RM43 million to RM45 million per annum, or 11.3 per cent in 2012 financial year.

 

This is assuming that there will be no revenue sharing with the government.

 

OSK also said that although the quantum of increase is rather substantial at 27 per cent and 28 per cent for the international low cost terminal and non-low cost terminal passengers, it would not substantially hamper passenger growth.

 

Furthermore, Malaysia's airport taxes are considered relatively lower than those charged by airports in Thailand and Indonesia, which are seeing strong growth in air travel despite their lower per capita income.

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OSK also said that although the quantum of increase is rather substantial at 27 per cent and 28 per cent for the international low cost terminal and non-low cost terminal passengers, it would not substantially hamper passenger growth

What ?! :blink:

That would mean T/S TF has been telling us lies all this while ? Cannot be. These analysts at OSK ...... :lol:

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Not really - a wholesale increase affects ALL airlines at the airport. If AK moves from T2 to T1, it only affects them - AK will have to increase bottom line prices.

 

The other airlines operating from T1 will still be charging the same amount.

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Nope, T/S TF's contention six months ago was that 'his' passengers were (are?) so price sensitive that the increase in A/T will prevent them from flying altogether. And that he was fighting tooth and nail, etc etc against relocating from T2 to T1, so everyone can fly :D

('Others' can operate from T1 and charge whatever they want :rolleyes: )

Of course there may be things and issues we are not aware of, but on the surface at least, what a noble cause :p

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'MAHB reneged on tax deal'

 

SEPANG: AirAsia Bhd has lambasted airport operator Malaysia Airports Holdings Bhd (MAHB) for reneging on a deal to freeze passengers service charges or airport tax for the low-cost carrier terminal (LCCT).

 

According to founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, the government had assured the low-cost carrier that there would be no hike in airport tax for the LCCT.

 

This assurance was given more than a year ago prior to the ground-breaking ceremony of the new LCCT at KLIA 2.

 

MAHB managing director Tan Sri Bashir Ahmad, AirAsia X chief executive officer Azran Osman-Rani, Kamarudin and Fernandes were present during the meeting.

 

The condition was secured following concerns of possible cost overruns in the development of the new LCCT at KLIA 2.

 

Kamarudin voiced concern that AirAsia and AirAsia X may be asked to bear the brunt of any possible cost overruns from the development of the new terminal.

 

MAHB had initially allocated RM2 billion for the construction of the terminal.

 

"We were told that the charges (for the new LCCT) will not be any different from the current one, and (should there be cost overruns) that it would not be passed on," Kamarudin said.

 

The government instead said MAHB can bring up the cost overruns matter to them and will decide if it can be accepted.

 

As consumers were reeling from the possibility of higher fares due to the Malaysia Airlines and AirAsia deal, it was reported on Thursday that the government had given the go-ahead for MAHB to raise airport tax for the LCCT to RM32 from RM25 now, as of September 15 2011.

 

The main terminal will start charging RM65 per passenger from the same date.

 

"We will fight it tooth and nail. We are paying for MAHB's inefficiencies, which is what I've always said is the problem," Fernandes said.

 

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/ton3/Article/

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Airlines to pay higher landing, parking charges?

 

Kuala Lumpur: Consumers are not the only ones that will pay more for using airports as airlines may also see landing and parking charges increase.

 

According to an airline source, Malaysia Airports Holdings Bhd is looking at a possible 30 per cent hike in landing and a 64 per cent increase in parking charges.

 

Landing charges are set on the basis of the frequency and size of aircraft, while parking charges are based on the duration and size of the parked aircraft.

 

MAHB is still holding discussions with airlines on whether the increase should be done on a staggered basis or at one go.

 

In a dialogue with foreign airlines last Wednesday, MAHB said it had received the go ahead to raise airport tax for passengers as well as parking and landing charges for airlines.

 

Minister of Transport Datuk Seri Kong Cho Ha has since confirmed the hike in passenger service charge.

 

MAHB will start charging RM65 for international passengers from September 15 this year, up from RM51 currently. The low-cost carrier terminal is also to see a hike to RM32 from RM25 on the same date.

 

According to Air France-KLM Royal Dutch Airlines country manager Estee Ng, during the dialogue, MAHB explained that the increase in passenger service charge (PSC), parking and landing had been approved in 2009 but not executed.

 

“The (PSC) hike is fair as MAHB pointed out, even with the increase, the rate is lower than other major regional airports with one or two exceptions,” she said.

 

Air France-KLM flies out of the KLIA.

 

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110815002916/Article/index_html

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RM14 in main terminal vs RM7 hike in LCCT... Don't like it as it's imbalance. They need to justify their reason for the hike apart from saying it's still cheaper than other airports.

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RM14 in main terminal vs RM7 hike in LCCT... Don't like it as it's imbalance. They need to justify their reason for the hike apart from saying it's still cheaper than other airports.

I think it is roughly the same percentage - about 28%.

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I think it is roughly the same percentage - about 28%.

 

Yea.... but the absolute amount is different. If they keep using percentage, then the absolute difference will be even more.

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Correct me if I am wrong - I am of the impression that LCCT airport taxes are supposed to be about half of that of the non-LCCT taxes. Therefore, this increase maintains that ratio.

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This is absolutely sick way of doing business in Malaysia. After dissing out so many years of free parking + free service etc to new airlines, and said had record profit; MAHB is now looking at new ways to 'sustain' the monumental growth.

 

Always seek short term solution, never long term. How much are they gonna charge this time?? more than Changi?? Dun think airlines will be too happy, they are more happy to drop KLIA for BKK or Changi since the latter both have higher travelling numbers.....

Edited by JuliusWong

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Correct me if I am wrong - I am of the impression that LCCT airport taxes are supposed to be about half of that of the non-LCCT taxes. Therefore, this increase maintains that ratio.

 

Whether true or not, this ratio business gets more problematic as the number gets bigger...

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MAHB Not At Liberty To Revise Aeronautical Charges

 

KUALA LUMPUR, Aug 15 (Bernama) -- Malaysia Airports Holdings Bhd (MAHB) is not at liberty to revise aeronautical charges without the government's approval.

 

In a statement today, MAHB said the passenger service charge (PSC) and other aeronautical charges were determined solely by the government as enshrined in the Civil Aviation Act 1969.

 

"Therefore, it is the sole prerogative of the government to reduce, maintain or increase aeronautical charges which MAHB abides by," it said.

 

It said this to clarify the statement in the article in the New Straits Times on Aug 13, 2011 titled 'MAHB reneged on tax deal'.

 

"The established level of PSC in Malaysia is not linked with the construction cost of the terminal and this is conveyed at the meeting referred to by AirAsia in the article," it said.

 

MAHB said, for example, when operations were moved from Sultan Abdul Aziz Shah Airport in Subang to KL International Airport in 1998, the PSC remained the same in spite of the cost of the new airport.

 

"Similarly, when new terminals were built at various airports, there was no corresponding increase in PSC.

 

"In fact, in some cases, the PSC was reduced as was the case with the new terminal in Melaka when it was reduced from RM51 to RM25," it said.

 

It said in the case of the existing Low-Cost Carrier Terminal (LCCT), the PSC was initially at RM35 and subsequently reduced to RM25.

 

"Even when the LCCT was expanded to cater to wide-bodied aircraft, there was no corresponding increase in PSC," it said.

Edited by flee

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New PSC, Aircraft Landing And Parking Charges

 

KUALA LUMPUR, Aug 16 (Bernama) -- Malaysia Airports Holdings Bhd (MAHB)today announced that it would be implementing new international passenger service charge (PSC) as well as aircraft landing and parking charges at the airports operated by the group.

 

It said the government has given the approval and that it was in line with the Operating Agreement signed between the Government and MAHB in February 2009.

 

In a statement Tuesday, MAHB said the international PSC would be increased from RM51 to RM65 at the KLIA Main Terminal Building, Sultan Abdul Aziz Shah Airport in Subang, Langkawi International Airport, Penang International Airport, Kota Kinabalu International Airport Terminal 1 and Kuching International Airport.

 

It said charges will be raised from RM25 to RM32 at the Low Cost Carrier Terminal KLIA and Terminal 2 Kota Kinabalu.

 

The new rates are to be applicable from September 15.

 

PSC is paid by the travelling passenger and airlines assist airports with the collection of these charges.

 

MAHB said the PSC rates have not been changed since 2002.

 

It said the aircraft landing charges will be increased in three stages by nine per cent per annum from January 2011, January 2012 and January 2013.

 

The aircraft parking charges are to be increased in three stages by 18 per cent per annum from January 2011, January 2012 and January 2013.

 

It said under the present incentive scheme, MAHB provided free landing for three years for all new routes and additional frequencies operated by the airlines.

 

It said parking charges would be based on a 12-hour block with the first three hours free.

 

The airport operator said the landing and parking charges have not been changed for the last 17 years and Malaysia offered one of the lowest charges in the world.

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Airport’s operation cost is mostly fixed. Given pax number has increased substantially since 2002, wonder where all these extra revenue/profit has gone to?

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MAS & AirAsia To Feel Impact Of MAHB's Charges Hike, Says Hong Leong Investment

 

KUALA LUMPUR, Aug 17 (Bernama) -- Both Malaysia Airlines and AirAsia, are expected to see a direct impact on earnings from the higher aircraft parking and landing charges, announced by Malaysia Airports Holdings Bhd (MAHB) on Tuesday.

 

Hong Leong Investment Bank said it is estimated that each airline will incur an incremental RM9 million per annum for the next three years.

 

In a research note Wednesday, Hong Leong Investment said however, both aviation companies are likely to pass through the additional cost to customers.

 

"The additional cost for AirAsia's passengers is estimated at only 45 sen per pax and MAS at 64 sen per pax.

 

"There might be concerns over the potential impact to overall air travel demand. But, we reckon that the additional cost of RM7.50-RM14.50 is very marginal, and unlikely to have significant impact on demand," the research house said.

 

MAHB has announced that it would be implementing a new international passenger service charge (PSC) as well as aircraft landing and parking charges at the airports operated by the group.

 

It said the government had given approval and that it was in line with the Operating Agreement signed between the government and MAHB in February 2009.

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