Sky-high DCA fees, airlines to pay up to 10 times present rate

[JuliusWong 0]

PETALING JAYA: Airlines operating out of Malaysia will be expected to pay up to ten times more in fees charged by the Department of Civil Aviation Malaysia (DCA) effective April 15.

The increase in fees for everything from the usage of air space, air traffic facilities and other services to the air operator’s certificate (AOC) and the pilot’s flight licence will see a big increase under a review of fees and charges made by the DCA after 40 years.

Some airlines are surprised with the high fees, as they thought it was still at a proposal stage when they were briefed by DCA officials last Friday, but it is learnt that the DCA wants to start charging the new fees next week.

The rise would lead up to a ten-fold increase in airlines’ monthly air navigation flight charges (ANFC), which forms the biggest cost item for the usage of DCA services.

Under the revised fee, the bigger the aircraft, the more the cost, and even the smaller jets, cargo planes and helicopters have not been spared.

This will certainly eat into the airlines’ bottomlines and potentially lead to higher airfares. Airlines may also impose miscellaneous charges in a bid to pass on the higher cost to travellers.

“The rise is too drastic and too fast,” said an airline executive.

He said the worst hit by this new charges would be airlines like AirAsia, Malaysia Airlines and Malindo Air that have several hundred domestic flights per week. These airlines did not respond to queries from StarBiz.

Based on the briefing given to the airlines, the ANFC charges will rise from five sen per nautical mile now to 50 sen for lightweight aircraft. For the bigger birds (the A320/A330 and B737/B777), the cost will rise from RM1-RM2.50 per nautical mile from 10-25 sen now, and the super jumbo A380 will see charges swelling to RM3 from 30 sen now. The minimum charges will be raised from RM5 to RM50 per nautical mile.

As for the AOC, which is a vital document for airlines to fly, the initial approval fees will balloon to RM80,000 yearly from RM400 now for mid-sized aircraft, and yearly renewals will rise from RM400 to RM30,000.

Pilots who have to be licensed to fly will have to fork out RM500 for their initial flight crew licence and RM300 for yearly renewals from RM100 and RM60 now.

“If an airline is paying RM120,000 a month now in ANFC fees, its bill will rise to RM1.2mil a month depending on aircraft type and frequency.

Some airlines are unhappy with the new charges, but DCA director-general Datuk Seri Azharuddin Abdul Rahman when contacted by StarBiz yesterday said “they have to understand that our expenses for delivery of services is going up as well. We have to upgrade our systems, maintain and replace them as we want to give them the best.

More: http://www.thestar.com.my/business/business-news/2016/04/06/skyhigh-dca-fees/

They are crazy or what?!!! AOC initial cost was RM400, now is RM80,000 yearly!!

[RaymondT 0]

It just means potentially business will go away to other countries and hubs will start moving out of Malaysia?


Anyone knows what our neighbouring countries and charging?

[Mulyadir Fitri 0]

I had a feeling this would come when I first read of the plans for the 650mil KL ATCC. The pax will be at the losing end. Fares will definitely be higher.

[Alif A. F. 0]

The proposed rise rate is very steep and will be done so in short notice to airlines. I, as passenger already feels the heat from DCA's Director General, not from airlines.

Edited April 6, 2016 by Alif A. F.

[Khalil Abd Halim 0]

the cost of which will be transferred to the passengers.....no more cheap fares....

[Izanee 0]

Forgot that, airlines will not even fly here. Why bother? Major airlines can't even fly here with rock bottom rates! Stupid move by DCA

[Waiping 12]

Take a step back and you will notice a lot more essentials have seen unreasonable price increase.

 

Again, why fly to KUL?

[alberttky 0]

It just means potentially business will go away to other countries and hubs will start moving out of Malaysia?

 

 

Anyone knows what our neighbouring countries and charging?

 

CAAS charges SGD144 for initial issue of Professional licence.

[Alif A. F. 0]

Fees charged by DCA hampers Malaysia's aviation competitiveness, says Maybank IB

 

Details: http://www.theedgemarkets.com/my/article/fees-charged-dca-hampers-malaysias-aviation-competitiveness-says-maybank-ib

 

Seems like the analysis implies that smaller capacity airports will be adversely affected...

[Cire 0]

Everything is up except our currency value.

There must be some other logical explanation on this hike besides wanting to compensate for increased operational cost, and also its intention for this hike to fund new equipment purchases. Repay government loans perhaps?

[Leong Chuo Sheng 0]

DCA is supposed to be corporatised to become Civil Aviation Authority of Malaysia (CAAM). They will need their own revenue streams for the future.

[Y. J. Foo 0]

DCA is supposed to be corporatised to become Civil Aviation Authority of Malaysia (CAAM). They will need their own revenue streams for the future.

So essentially they will become similar to UK CAA, where the operation expenditures must entirely come from the charges they levy.

 

Does not seem to be typical though. Imagine if FAA were to become private...

[flee 5]

Similar to the APD in the UK. Suddenly the aviation industry is saddled with excessive increases over a short period of time....

 

MAHB should brace itself for lower volume of passengers. Domestic pax will be hardest hit as all of their travel is within airspace controlled by the DCA.

[Alif A. F. 0]

Similar to the APD in the UK. Suddenly the aviation industry is saddled with excessive increases over a short period of time....

 

MAHB should brace itself for lower volume of passengers. Domestic pax will be hardest hit as all of their travel is within airspace controlled by the DCA.

What about Peninsular-Borneo flights? Airspace over South China Sea is monitored by Singapore right?

[Eddy Liew 0]

What about Peninsular-Borneo flights? Airspace over South China Sea is monitored by Singapore right?

That's correct, it is under Singapore FIR. Though Indonesia has plans to take over airspace abeam Natuna Ranai, not sure whether it will materialize.

[Mulyadir Fitri 0]

We have klia2 fee. We will soon have DCA fee in our AirAsia tickets

[flee 5]

Malaysian air travellers are very price sensitive. If the cost of air tickets rise, we might see the passenger numbers start to fall - not a good thing for the aviation industry.

[Radzi 2]

The new rates has been published as part of MCAR 2016.

 

Scroll down for the English part.

Edited April 15, 2016 by Radzi

[BC Tam 2]

We have klia2 fee. We will soon have DCA fee in our AirAsia tickets

Apparently already in thought process !

Malaysian Aviation Commission exploring charging airline passengers

http://www.thestar.com.my/business/business-news/2016/07/18/aviation-body-seeks-funding/