Malaysia Airlines Passengers Winning, KLIA 2 Users Losing Out

Malaysia Airlines (MAS) has been lobbied since its restructuring for a revision of Kuala Lumpur International Airport Passenger Service Charge (PSC) arguing that the difference between KLIA Main Terminal and Terminal 2 was detrimental to competition. MAS has to charge passengers twice as much for the use of the Main Terminal than for the Terminal 2.

Finally, the Malaysian Aviation Commission (Mavcom) has agreed with MAS management. From January 1st 2017, a new PSC structure is to be implemented which will indeed mostly favour Malaysia’s national carrier.

MAS passengers will enjoy a reduction of 46% of the PSC for flights to ASEAN destinations. This means a saving of RM30 per segment (equivalent to US$7.30). ASEAN PSC is a new tax introduced by MAHB, the Malaysian Airports Authority. The same fee will apply at KLIA 2 for ASEAN flights, which represents a 9% increase compared to the current RM32 PSC. This will affect partially the AirAsia Group, the main user of KLIA2.

ASEAN routes make up about 40% of the total traffic at KLIA and 70% of total traffic at KLIA2.

However, intercontinental flights will be the most affected. From January 1st 2017, international PSC –for non ASEAN flights- will go up to RM73 (US$17.80) at KLIA (compared to the current PSC of RM65 or US$15.85) and to RM50 at KLIA2 (compared to the current PSC of RM32). On January 1st, 2018, The new fee of RM50 will be raised again at KLIA 2 to be put on par with KLIA Main Terminal PSC of RM73. According to local experts, AirAsia X will be the most affected by the change.

Domestic flights will however see the biggest increase. PSC is to be almost doubled for KLIA2 users, up from RM6 to RM11 while it will go from RM9 to RM11 for passengers of KLIA Main Terminal.

AirAsia expressed already its disagreement over equalising both PSC. The airline indicated that it then could consider moving back to KLIA.

MAHB already replied by announcing to be fully opened for potential transfer of airlines’ flights from one terminal to another. In a statement, MAHB declared that “both terminals were part of the same airport network system. We take note of media reports stating that AirAsia is planning to move its operations to KLIA. Similarly, we have also noted Malaysia Airlines’ interest to operate at klia2,” according to the statement. MAS announced a few months ago to potentially have some long-haul low-yield flights based at KLIA2.