KUALA LUMPUR (Dec 19): AirAsia Group Bhd has called on regulators and policy makers to reject and rescind the decision by Malaysia Airports Holdings Bhd (MAHB) to raise the passenger service charge (PSC) to RM73 from RM50 previously.

In a statement uploaded on AirAsia's website today, AirAsia Malaysia chief executive officer Riad Asmat said the overall tourism sector, one of Malaysia's biggest revenue earners, and the interests of millions of Malaysians who have been able to fly due to the low fares pioneered by AirAsia, are being threatened by MAHB's price hikes.

"We urge the regulators and policy makers to rebuff this unfair and unreasonable attempt by MAHB to use its monopoly to enrich itself further by revisiting and rescinding the decision to raise the PSC," he said.

Although MAHB has argued that it needs more profit to operate smaller loss-making airports on behalf of the government, Riad said it is obvious from its exponential growth in profits over the last three years that this was not the case.

He said MAHB's net profit more than tripled in 2017 to RM237 million from RM73 million in 2016 after nearly doubling from RM40 million in 2015, and is set to break yet another record this year.

"The additional RM23 to be collected will amount to more than RM100 million a year that will go straight to MAHB's bottom line rather than to the government. MAHB will continue to be among the most profitable Malaysian companies for many years to come. But this will come at a cost to the wider Malaysian economy and at the expense of engines of growth such as AirAsia and AirAsia X," said Riad.

Riad also referred to MAHB's defence of its decision to charge the extra RM23 in PSC from each travelling passenger, saying it is "bound by Article 15 of the Chicago Convention of 1944".

"This would almost be laughable if it were not so serious. MAHB is falling back on a convention ratified in 1944, when Japan still ruled Malaya and when Frank Whittle was testing the jet engine and when only the well-heeled could fly.

"For all these reasons, we shall not accede to MAHB's demands and we will take our battle both to the people and to the court of law," he said.

AirAsia has previously said that although the airport operator had increased the tax to RM73 on Feb 1, 2018, it was not obligated to collect the PSC at the new rate, and refused to collect the additional charge from passengers.