New standardised PSC rates introduced at all Malaysia airports

 |Oct 31, 2016
Kuala Lumpur International Airport (KLIA) in Sepang.
Kuala Lumpur International Airport (KLIA) in Sepang.

The Malaysian Aviation Commission (Mavcom) has announced new Passenger Service Charge (PSC) rates for domestic and international destinations, including a new introductory rate for Asean destinations.

The revised rates are effective Jan 1, 2017 and applicable to tickets issued from that date onwards.

PSC rate for flights to Asean countries will be RM35 per departing passenger from the current RM65 out of all airports, making Malaysia the first Asean member state to introduce such a tier.

Under the revision, PSC rate will be a standard RM11 for domestic flights, up from current RM9 for Kuala Lumpur International Airport (KLIA) and other local international airports, and RM6 for KLIA2.

New PSC rates for international flights from KLIA and other airports are RM73 and RM50 for the KLIA2.

Current rates for international flights, including Asean countries, are RM65 for international airports and RM32 for the KLIA2.

Tickets issued before Jan 1, 2017 would not be subjected to the new rates, even if the date of travel took place on or after Jan 1, 2017, Mavcom said in a statement today.

The introduction of the Asean PSC tier has been forecasted to increase the possibility of opening secondary gateways in Asean and consequently increasing traffic inflows into points in Malaysia.

It is in line with the Asean Single Aviation Market (Asean-SAM), also known as the Asean Open Sky Policy, the region’s major aviation policy.

The last PSC revision was on Nov 15, 2011.

In addition to the revised PSC rates, the Commission will also introduce measures to ensure airport operators remain committed and accountable for improving airport service levels and financial efficiency, for the benefit of air travellers in Malaysia.

Pursuant to this objective, Mavcom said it was currently developing a framework that linked aeronautical revenue to customers’ and stakeholders’ satisfaction levels.

The framework will be introduced in 2017.

“We are very focused on a long term and sustainable outcome. Our work on the PSC review aims to safeguard consumer interests, promote fair competition and ensure airport operators continue to enhance their service levels,” Mavcom executive chairman Abdullah Ahmad.

The commission will also continue to strive for consumer protection through the Malaysian Aviation Consumer Protection Code (MACPC) 2016.

The PSC, an aeronautical charge, is levied on passengers departing on domestic and international flights from all national airports.

It is collected by the airlines upon purchase of tickets and paid to the airport operator following completion of the flight.

Passengers are eligible for a full refund of the PSC if they did not travel for flights that they had purchased tickets.

Mavcom said the gradual equalisation of PSC at KLIA and KLIA2 to facilitate a level playing field would be introduced in stages with an immediate equalisation of PSC for domestic and Asean flights, a reduction in difference of the international destinations, beyond Asean, PSC between KLIA and KLIA2, and review of the PSC to be performed in 2017 with a view for complete equalisation by Jan 1, 2018

In the long term, equalised PSC rates would facilitate an environment of fairer competition between airlines operating at these two terminals and also enables Malaysia to be better aligned to international guidelines.

In formulating the PSC rates for airports in Malaysia, Mavcom took into consideration the existing PSC rates in other airports around the region and globally.

After the revised structure, passenger airport charges in Malaysia remain amongst the lowest regionally and globally, said the commission.

Malaysia Airlines Bhd (MAS) has welcomed the revised PSC rates by launching a sale on its selected Asean destinations starting this week.

MAS will launch a ‘Freedom Fares’ sale starting on Wednesday Nov 2 until 8, 2016 on selected Asean routes with fully inclusive fares from RM149 and domestic from RM99.

 

The national carrier’s chief executive officer (CEO), Peter Bellew said it was great news, adding that MAS customers now have the freedom to choose from whatever terminal they wished in Kuala Lumpur.

He said the revised PSC rates have created opportunity for MAS to compete on a level playing pitch in Malaysia as the airline continuously fights for every dollar and cent savings where possible.

AirAsia Group CEO Tony Fernandes, who was previously against Mavcom move to equalise PSC rates, has lauded the revised PSC.

He said it was a huge step forward for Malaysia as the acceptance that low charges were what the country needed.

“Hearing very good news on airport charges. Great for consumers. Well done Mavcom,” Fernandes tweeted.