Comment
Striking a balance
May 1st 2016
Airlines have had it easy at Kuala Lumpur International Airport (KLIA). Some fees and charges have not changed for almost 40 years, an era that included operations at the city’s former international airport at Subang and the construction and equipping of the present 18-year-old KLIA and its support facilities. Read More »
So it is difficult to criticize Malaysia’s Department of Civil Aviation (DCA) for increasing fees for airlines that use KLIA and Malaysia’s other airports.
Until the price rise in mid-April, Malaysian airport fees and charges were among the lowest, if not the lowest, in the world. Current costs of upgrading air traffic management systems, providing air navigation services, introducing new technology and retaining talented staff bear no relation to airport budgets of four decades ago.
In fact, the Malaysian government has been heavily subsidizing the system, and therefore airlines, for most of that time. In today’s economic climate that could not continue. Increases were inevitable.
However, the airlines have a very good case against the government when it comes to the timing and size of the increases.
After a DCA briefing with airline representatives, which carriers believed was a prelude to more detailed discussions about fees, they were told the new rates would apply from April 15, less than two weeks after the briefing. The sting in the tail was that the charges would rise ten fold.
It is now accepted by all parties that there was insufficient consultation with airlines and their representative bodies about the fee changes.
Under the new system, an airline now paying US$360,000 a year to the DCA would be required to pay $3.8 million. To quieten the howls of outrage from airline associations, the DCA agreed the fees would be doubled for now, but incremental increases would follow subject to detailed industry discussions.
As both the Association of Asia Pacific Airlines (AAPA) and the International Air Transport Association (IATA) pointed out, such increases should be introduced in line with the International Civil Aviation Organization (ICAO) Policies on Charges for Airports and Air Navigation Services.
This prescribes that user charges should be non-discriminatory, transparent and determined “in close consultation” with industry stakeholders.
And if fees increase airlines argue, carriers want regulatory authorities and air navigation service providers to deliver better value by investing in technology, improving operational efficiency, delivering better service and establishing a long-term system of rates and charges.
What airlines don’t want is a clumsy fee regime imposed on them with little notice or consultation.
