AirAsia and Malaysia Airports Holding drop on-going legal charges

Malaysia Airports Holdings (MAHB)'s subsidiary, Malaysia Airports (Sepang) (MASSB), and Capital A, the holding company of AirAsia Aviation Group, have discontinued legal proceedings between all parties.  According to MAHB's MD, Iskandar Mizal Mahmood, close collaboration between all stakeholders within the aviation ecosystem is key in propelling towards growth for both the aviation industry and the country.

The dispute between MAHB and AirAsia started in 2019, where MAHB imposed a new passenger service charge of RM73 on passengers using klia2 to destinations beyond ASEAN, an increase from its previous PSC of RM50. AirAsia refused to collect the additional RM23 from its guests to ensure air travel remains affordable for all. The Kuala Lumpur High Court dismissed AirAsia and AirAsia X's striking out application in relation to the payment for outstanding passenger service charge MASSB, hence, forcing the airline to charge the increased passenger service charge.

AirAsia Malaysia CEO, Riad Asmat, said: "We will collect the full RM73 PSC but we do so under strong protest. Itemising the additional passenger service charge will allow our guests departing from klia2 for non-Asean destinations annually to see how much they're paying for inferior facilities. I believe many will agree with us that they’re not getting their money's worth, especially when compared to the far superior facilities at KLIA.”

A few months later, AirAsia filed a RM479.78 million claim at the Kuala Lumpur high court against MASSB, for losses and damages suffered by AirAsia and its long-haul sister airline AirAsia X. AirAsia had accused MASSB’s negligence in the management, operation, maintenance and provision of airport services and facilities at klia2 for its losses.

According to AirAsia, before filing the claim, AirAsia and AirAsia X sought mediation by the Malaysian Aviation Commission (Mavcom) on their dispute with MASSB, in accordance with Sections 74 to 78 of the Mavcom Act. According to the Act, any dispute between two or more aviation providers should be solved by mediation first. However, Mavcom refused to mediate, and a subsequent attempt by AirAsia to seek a judicial review of Mavcom’s inaction was dismissed, AirAsia said. 

In 2020, MAHB retaliated by filing a claim against AirAsia in the sum of RM78,162,964.90 for outstanding aeronautical charges comprising passenger service charges, passenger service security charges, aerobridge charges, aircraft parking charges, check-in counter charges, landing charges and late payment charges.

Mahmood said: “There are no longer any legal proceedings or material litigation from MAHB against AirAsia/ AirAsia X. We are committed towards working together for the mutual benefit and success of all the aviation stakeholders i.e. airlines, airports, passengers and the industry.”

Meanwhile, Capital A CEO, Tony Fernandes said: “As the world recovers from the pandemic, and substantial losses in the aviation sector in particular, it is integral that all stakeholders work together to stimulate the air travel revival. As two major players driving the aviation ecosystem, it is more important than ever that MAHB and our Malaysian based airlines AirAsia and AirAsia X, show solidarity in making Malaysia’s aviation industry competitive and attractive again." He added that they have found common ground to reach an amicable outcome. "This bodes well to support the speedy recovery of the industry and to stimulate Malaysia’s tourism and economic growth," Fernandes said.

Separately, AirAsia X elected a new chairman last month. Mahmood Fawzy focuses on driving corporate growth strategies and providing robust oversight of the board and senior leadership team. 

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