A 50% discount on landing charges will be given to all airlines operating from Malaysia for two years effective April 1, said Deputy Prime Minister Datuk Seri Najib Tun Razak.
StarBiz has learnt that the recommendation was put forth by airport operator, Malaysia Airports Holdings Bhd (MAHB).
The International Air Transport Association (IATA) said the 50% rebate was a welcome relief for airlines, which are currently facing a slump in air travel due to the global economic slowdown.
“We appreciate the efforts of the Malaysian Government and MAHB to support the airline industry as 2009 is going to be one of the toughest years ever for international aviation,” IATA manager for corporate communications Asia Pacific Albert Tjoeng said from Singapore.
Idris Jala “Airline losses were at least US$5bil in 2008 and projected to be US$2.5bil this year.
“Asia Pacific carriers alone will lose US$1.1bil – the largest losses among the regions,” he continued.
“International passenger demand fell 5.6% in January – the fifth consecutive month of contraction – while cargo demand has fallen off a cliff with a 23.2% decline in January. So every measure will help airlines weather the challenging environment in the year ahead.”
The total amount that MAHB earns in landing charges a year is about RM169mil, according to an analyst with Maybank Investment Bank.
MAHB will lose half of that with the discount but a government official who requested anonymity said the airport operator would be compensated by the Government.
The country’s two airlines – Malaysia Airlines (MAS) and AirAsia group (AirAsia and AirAsiaX) – are expected to each save about RM38mil a year in landing charges with the 50% discount, the government official said.
MAHB declined to comment when contacted but MAS managing director Datuk Seri Idris Jala said: “This is wonderful news.”
“It’s great that the Government is simulating demand in areas such as aviation that has a high multiplier effect on the country’s economy,” he continued.
“A study done by Khazanah Nasional Bhd and Bain Consulting shows that aviation has a multiplier effect of 12.5 to the Malaysian economy (i.e. every ringgit spent on aviation generates RM12.50 in the economy). This is positive for the economy.”
AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes, speaking from London, thanked the Government for the discount.
“It is a good move and something we have been advocating for a long time. We continue to expand and invest in routes and aircraft and recruit people and last month we recruited 150 people,” Fernandes said.
Najib, who is also the finance minister, also announced that the new low cost terminal at KLIA will be built by MAHB and be ready by 2011 at the cost of RM2bil.
Responding to this, Fernandes expressed hope that MAHB would charge fair landing and parking charges.
“The charges should be based on the RM2bil investment and not any arbitrary figure,’’ Fernandes said.
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