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Passenger Service Charges (“PSC”) Fully Equalised from 2018
Commission introduces framework to improve airport service levels

KUALA LUMPUR, 30 NOVEMBER 2017 – The Malaysian Aviation Commission (MAVCOM) today announced the completion of a full equalisation of the Passenger Service Charges (“PSC”) to be implemented across KLIA, klia2 and all other airports in Malaysia.

Following the Commission’s revision of the PSC announced in October 2016, only the PSC rate applicable at klia2 for international destinations beyond ASEAN was pegged lower than those at other airports in Malaysia. The PSC rate at klia2 for such destinations was set at RM50, while the rate set for other airports in Malaysia was RM73.

Effective 1 January 2018, the PSC rate for international destinations beyond ASEAN at klia2 will be RM73, being the same rate as those at other airports in Malaysia. All other PSC rates at klia2 and other airports remain unchanged. The revised PSC will be applicable to tickets issued from 1 January 2018. Tickets issued prior to this date will not be subjected to the new rate even if the date of travel takes place on or after 1 January 2018.

Table 1 –  PSC rates to be effective from 1 January 2018
Source: MAVCOM

Following this latest revision, the PSC rates in Malaysia remain amongst the lowest in the world.

MAVCOM, which was established in March 2016 as an independent economic regulator for the civil aviation industry in Malaysia, is responsible for the setting of airport aeronautical charges, including the PSC, as per section 46 of the Malaysian Aviation Commission Act 2015.

As a recap, MAVCOM in October 2016 announced:

1. the introduction of a new and lower PSC tier for travel to ASEAN countries;
2.     the equalisation of PSC at klia2 and other airports in Malaysia, to be performed in stages with:
   • an immediate equalisation of PSC for domestic and ASEAN flights;
   • a reduction in difference of the international (beyond ASEAN) PSC between klia2 and other airports in Malaysia; and
   • a review of the PSC to be performed in 2017 with a view for complete equalisation.
3. Revised domestic and international rates for all airports; and
4. Commencement of development of a regulatory framework to improve service levels at airports in Malaysia.

Today’s announcement marks the completion of the gradual equalisation of PSC at klia2 with those of other airports in Malaysia. This is the result of the 2017 review performed by the Commission, as referred to in its announcement of October 2016. The said review had also taken into consideration inputs and feedback from the industry.

In addition, and signalling our higher service expectation on airport operators in Malaysia following the PSC revision, the Commission is also progressing in its development of the regulatory framework to improve service levels at airports in Malaysia, as referred to in MAVCOM’s announcement of October 2016. The objective of this airports Quality of Service (Airports QoS) framework is to enhance passenger comfort at the airport, ensure airport operators prioritise consumer service levels and facilitate improved airport user experience for airlines, ground handlers and other users of airports in Malaysia.

The Airports QoS framework, which has been developed taking into consideration an industry consultation process, shall set service standards and key performance indicators for various airport user experiences, including cleanliness of washrooms, wayfinding, availability and quality of infrastructure, queueing times and timeliness of baggage handling. In the event these airports service standards are not maintained or achieved, the airport operator could be imposed a financial penalty of up to 5.0 per cent of the airport’s aeronautical revenues. The Airports QoS framework shall be gradually implemented in airports in Malaysia, commencing with KLIA and klia2 in Q3 2018.

Further details of the Airports QoS framework shall be made available to the public in due course.

YBhg. Gen. Tan Sri Dato’ Sri Abdullah Ahmad, RMAF (Retd), Executive Chairman of MAVCOM, said, “The Commission had undertaken a robust process to arrive at this position, which we believe to be more equitable. Aside from ensuring airport charges in Malaysia remaining amongst the lowest in the region, we expect this move to also allow the Government to reallocate subsidies to more needful purposes. The equalisation now progresses us in international aviation and we look forward to further strengthening Malaysia’s aviation sector.

“The Airports QoS framework is yet another mechanism introduced by MAVCOM to empower the consumers further. We hope to implement the Airports QoS framework in 2018 as part of our efforts to protect consumers and ensure a better travel experience overall as it is aimed at improving service levels at airports while ensuring that airport operators are held accountable for improving their standards.

“We are very focused on a long term and sustainable outcome in all that we do. Our work on the PSC review and the Airports QoS framework aims to safeguard consumer interests, enhance passenger experience, promote fair competition, ensure the airport operators continue to enhance their service levels and boost Malaysia’s status as a regional aviation hub. At the same time, the Commission will continue to strive for consumer protection through the Malaysian Aviation Consumer Protection Code 2016,” Abdullah added.