KUALA LUMPUR (Aug 10): Malaysia Airports Holdings Bhd and Capital A Bhd have both decided to drop legal proceedings against each other that they initiated via their subsidiaries Malaysia Airports (Sepang) Sdn Bhd (MASSB) and AirAsia Aviation Group Ltd (AirAsia Group).

The two groups have locked horns since the end of 2018, when AirAsia Group's Malaysian operations refused to collect the higher passenger service charges (formerly known as airport tax) from passengers that MAHB and MASSB demanded, after the rate was raised to RM73 per pssenger in 2018 from RM50. 

This escalated into a series of lawsuits between the groups, starting with three civil suits MAHB filed against AirAsia Group's units — AirAsia Bhd and AirAsia X Bhd — to claim for the unpaid PSC and late payment charges related to them. They obtained a summary judgement from the High Court in 2019, which the Court of Appeal upheld earlier this year.

MAHB also filed a defamation suit against AirAsia, AirAsia X and their then CEOs Riad Asmat and Benyamin Ismail, respectively, for implying that it was the airport operator that had increased the PSC rate, when it was Mavcom that had done so.

In response, AirAsia countersued MAHB for about RM480 million worth of losses and damages, which the airline group claimed MAHB allegedly caused because of its negligence in the operation and management of klia2.

In a joint statement Wednesday, MAHB confirmed that it no longer has any legal proceedings or material litigation against AirAsia Bhd and AirAsia X Bhd, Capital A's subsidiaries. Capital A, likewise, said the two AirAsia units have withdrawn their legal actions against MAHB.

Both groups also stated their desire to work together to build a stronger platform for the Malaysian tourism and travel industry.

“We are pleased to confirm that all parties are dropping proceedings,” MAHB managing director Datuk Iskandar Mizal Mahmood said.

“We believe that close collaboration with all stakeholders within the aviation ecosystem is key in propelling us towards growth for both the industry and the country. We are committed towards working together for the mutual benefit and success of all the aviation stakeholders – the airlines, airports, passengers and the industry,” Iskandar Mizal said.

Meanwhile, Capital A chief executive officer Tan Sri Tony Fernandes said the group is thrilled "to have found common ground to reach an amicable outcome on the resolution of any outstanding matters with MAHB, through supportive and constructive dialogue in the spirit of the partnership." 

“This bodes well to support the speedy recovery of the industry and to stimulate Malaysia’s tourism and economic growth. 

He added that it is integral that all stakeholders work together to stimulate the air travel revival as the world recovers from the pandemic and substantial losses in the aviation sector in particular.

“As two major players driving the aviation ecosystem, it is more important than ever that MAHB and our Malaysian based airlines AirAsia Bhd and AirAsia X Bhd, show solidarity in making Malaysia’s aviation industry competitive and attractive again,” Tony said. 

“We thank MAHB for their support to make air travel out of our main hub in klia2 not only affordable for many millions of passengers each year, but also with a mutual commitment to work with us on improved services to build a better tourism industry in Malaysia for the future, which is a win-win for us all," he added.

On Wednesday, MAHB’s shares declined three sen or 0.48% to RM6.28, valuing the group at RM10.42 billion, while Capital A’s shares slipped one sen or 1.55% to close at 63.5 sen, giving the group a market capitalisation of RM2.64 billion.