AirAsia seeks more than RM400m counter-claims against MAHB

AirAsia is seeking more than RM400 million in counter-claims against Malaysia Airports Holdings (MAHB) in response to a suit filed by the airport operator last month over airport taxes. The counter-claims were for losses and damages experienced by AirAsia and its long-haul sister airline AirAsia X due to operational disruptions at klia2. These include a ruptured fuel line and runway closures on numerous occasions.

In their statement of defence, both AirAsia and AirAsia X criticised MAHB for being “heavy-handed” in filing the suit and have also applied to “strike out” MAHB’s suit on grounds that it is “misconceived and premature”. This is because MAHB has not complied with the statutory provisions for dispute resolution within the Malaysian Aviation Commission (Mavcom) Act 2015 Act.

According to sections 74 to 78 of the Mavcom Act, MAHB and airline operators have a statutory obligation to mediate any dispute regarding any matter under the Act, and legal action may only be used as a last resort after mediation and dispute resolutions efforts have failed.

AirAsia CEO Riad Asmat and AirAsia X CEO Benyamin Ismail said, “AirAsia has always been prepared to engage constructively with MAHB and its subsidiaries, and it is regrettable that MAHB has chosen litigation for reasons best known to them.”

Both added that the dispute over airport taxes, which is at the core of MAHB’s suit, is specifically a matter subject to Mavcom’s purview for mediation and dispute resolution. Although MAHB is aware of this and engaged the company in both oral discussions and written correspondence, Riad and Benyamin said MAHB has chosen to “improperly circumvent” the Mavcom Act by filing the suit.

“We will continue to adhere to the legislative provisions under the Mavcom Act and seek our claim through mediation. However, we reserve the right to exhaust all avenues in recovering losses and damages caused by MAHB’s failure to carry out their duties as aviation service providers. We have repeatedly communicated these and other issues to MAHB but nothing has been done,” they added.

Both also said that travellers flying from klia2 should not be made to pay the same airport tax as those departing from KLIA due to inferior services at the former terminal. Earlier this year, AirAsia scrapped the RM3 klia2 fee for all flights departing from the terminal, following the announcement to stop charging and collecting the fee in a bid to keep fares low.

Although AirAsia has proposed to build its own low-cost terminal (LCCT) in Labu in 2008 at a fraction of the cost of klia2, the government rejected the plans after initially approving them. This was because MAHB claimed it could construct a similar terminal closer to KLIA with the same facilities and the same charges as the LCCT, AirAsia’s former Kuala Lumpur hub.

“Based on these representations, we agreed to move from LCCT to klia2. Despite that, we have continued to dispute MAHB’s decisions regarding the site selection and design of klia2,” Riad and Benyamin said.

“We have always believed and maintained that these decisions resulted in cost escalations and delays in the completion of klia2,” they said, adding that increasing airport tax was also in direct contradiction to MAHB’s representations that Malaysia was to be promoted as a low-cost air travel hub.

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