Higher airport tax – why?
MOST people are not averse to paying a bit higher for a product or service, if they get value for their money and if the hike is reasonable. After all, in today’s inflationary environment, it is inevitable that prices go up.

However, when the Malaysian Aviation Commission (Mavcom) announced revisions to passenger service charges (PSC), the question arises — are passengers getting value for their money?

The revision is for the period from June 1, 2024 to Dec 31, 2026 and to make things easier, all international departures from KLIA1 is now RM73 while all international departures from KLIA2 is now RM50, in keeping with the move to uniformise PSC rates.

For those travelling to destinations outside Asean from KLIA1, there is no change in PSC while for those travelling to destinations outside Asean from KLIA2, the rate is now cheaper as it was previously RM73. The PSC is also imposed on all transit passengers, who previously did not have to pay.

Strangely enough, despite the calls for more intra-Asean travel and tourism, those travelling Asean routes will see their PSC charges rise for both terminals, as Transport Minister Anthony Loke explained that the hike for Asean routes was because no other Asean country gives a discount for travelling in the region but perhaps Malaysia could take a bold step by not revising the PSC upwards.

The last time Mavcom revised the PSC was in the beginning of 2018, just a year after revising it in the beginning of 2017.

Both the websites of Malaysia Airports Holdings Bhd (MAHB) and Senai Airport Terminal Services Sdn Bhd have not updated the fee structure (as of press time) even though the money collected goes to them as airport operators.

The other airports in the region are also raising prices.

Singapore’s Changi, from April 1, 2024 to March 31, 2025 will charge passenger service and security fee (PSSF) of S$46.40 (about RM163), aviation levy of S$8 and airport development levy (ADL) of S$10.80 for departures originating from the airport, while transit/transfer departures are charged PSSF of S$6 and ADL of S$3.

Six international airports under Airports of Thailand will start charging international departures PSC of 730 (about RM96) from April. Indonesia’s Soekarno-Hatta International Airport charges Rp150,000 (around RM45) to Rp266,400 for international departures.

What does PSC pay for? Airport tax, as the PSC is commonly known, goes towards operations, maintenance, security and development of airports, according to airport operators’ websites.

On the surface, the revision in PSC seems reasonable compared to neighbouring countries’ international airports.

However, any revision will be questioned, especially given the state of Malaysia’s premier airport, KLIA. Where does the airport stand against other airports in the region or globally?

According to the Skytrax World Airport Awards’ top 100 airports, Kuala Lumpur slipped five notches to 67th in 2023 from the year before.

Kuala Lumpur has not been in the top 10 list over the past 10 years and was last on the top 10 list in 2012 when KLIA placed eighth.

In 2001, KLIA placed second. Years of neglect and mismanagement are showing through.

There are now newer and better airports in Asia, but age cannot be used as an excuse. Changi is over four decades old while KLIA is just over a quarter-century old. Changi is consistently in the Skytrax top 10 global airport rankings and in the top 10 for other airport services.

KLIA’s misfortune stems from having unstable governments over the recent years that have missed the opportunity to replace critical assets such as the aerotrain and baggage handling systems when there were virtually no foreign or domestic passengers.

The government and MAHB now have their work cut out as the push to improve over a three-year period was announced only in mid-2023. Visit Malaysia Year is in 2026.

The aerotrains will be operational in early 2025, so passengers departing or arriving from KLIA1’s satellite building have to take buses to and from the main building for at least another year.

The new baggage handling system may only be operational in late 2025 or early 2026, judging from the contract period for the replacement of the system, which is from November 2022 to November 2025.

We can only hope there are no major problems that will lead to social media rants by passengers.

A rebranding exercise for KLIA1 and KLIA2 will hopefully yield some results while efforts are under way to offer better food and beverage as well as retail experiences. These could make an impact over time.

However, KLIA remains in bad shape, as the 2023 Skytrax rankings of the top 100 airports show. Never mind social media, the Skytrax rankings are a better gauge as air travellers are the ones who evaluate the airports, and it looks like they are not impressed.

And this is after MAHB, aiming to create “a more seamless guest experience”, introduced STARdesk, a feedback management platform and EZBagz, a self-service bag drop facility, last May in KLIA.

It seems those efforts are not good enough and KLIA still has a long way to go. Meanwhile, passengers have to pay more in airport tax for Asean routes, arguably the most travelled destinations. They have a right to question why.

This article first appeared in Star Biz7 weekly edition.
Star Biz7,Airport tax,PSC,KLIA,Skytrax,MAHB,aerotrain,KLIA1,KLIA2,baggage,terminal
When the Malaysian Aviation Commission (Mavcom) announced revisions to passenger service charges (PSC), the question arises — are passengers getting value for their money?