It comes as surprise that AirAsia may want to move ops to KLIA
THE STAR
Surprise move: AirAsia is considering moving its operations to KLIA as early as Jan 1. (Pic shows AirAsia Bhd. aircraft standing next to boarding gates at Kuala Lumpur International Airport 2 (KLIA2) in Sepang, Malaysia)" (Default Alternate Text: "Surprise move: AirAsia is considering moving its operations to KLIA as early as Jan 1
IT does come as a surprise that AirAsia Bhd may want to move its operations to KL International Airport (KLIA).
This is a terminal it did not want to operate in just a few years ago because of the cost factor. Being a low-cost airline, cost is its biggest factor and what it wants is a bare-minimum terminal that allows it to price its fares affordably for mass appeal.
However, it looks like the circumstances have changed with the latest revision done to the passenger service charge (PSC).
Now, it wants to consider moving to KLIA as early as Jan 1 because it feels there is no real distinguishing factor between both terminals when it comes to the PSC.
On Monday, AirAsia Malaysia CEO Aireen Omar challenged Malaysia Airlines Bhd (MAS) CEO Peter Bellew to move to KLIA2, as he had earlier said that he would move some flights to KLIA2 as he found “KLIA2 to be a much better airport”.
She said AirAsia was happy to swap airports with MAS, more so since the PSC is more equalised and the move would provide the airline passengers the better comfort they deserve.
The reason why MAS wanted to move some of its flights to KLIA2 was because of the US$8 price advantage KLIA2 offered in the PSC.
Surprisingly, now MAS is sitting firm at KLIA, as Bellew said on Monday that the need does not arise. Instead, he said the revised rates did create an opportunity for MAS to compete on a level playing field in the country, as it fights for every dollar and cent in savings where possible.
At this stage of its life, MAS is fighting to return to the market after losing market share caused by the twin air disasters in 2014.
The new PSC rates come into effect on Jan 1 and the gap in pricing between the two terminals has been narrowed and would likely be equal by Jan 1, 2018.
For domestic travel, it has been standardised at RM11, for international travel, the rate is up 3% to RM73 at all airports, but at KLIA2 it rose 56% to RM50.
There is one uniform rate for Asean at RM35, which the International Air Transport Association (IATA) felt would distort the market.
To IATA, the regulator has taken “half a step forward. While we welcome the equalising of the PSC for domestic and Asean flights, we are disappointed that it was not done for all the PSC at KLIA”.
Malaysian Association of Tour and Travel Agents president Datuk Hamzah Rahmat also feels there is no justification to pay more if travellers are getting the same poor standard of service in many airports. That is the job of the regulator to watch out for so that the PSC rates commensurate with services provided, and if it is not, then it should be brave enough to impose penalties.
At RM73, KLIA’s PSC is no longer the cheapest in the region. It is slightly higher than Indonesia and Hong Kong airports’ PSC, but lower than Bangkok and Singapore charges.
Airport operator Malaysia Airports Holdings Bhd (MAHB) welcomes the switch as to it both the terminals, KLIA and KLIA2, are part of the same airport network system. AirAsia is scheduled to meet it on Monday over the issue.
The whole issue of switching terminals stems from the US$8 price advantage that KLIA2 offers at current PSC rates. That factor is much reduced with the new rates.
Switching airports is nothing new for airlines. They do it to best suit their business model. For travellers, if indeed AirAsia moves to KLIA, it would be good for international connections, as KLIA offers better comfort by way of passengers not having to walk miles on different terrains to reach their gates.
Malindo Air is an example of an airline that switched to KLIA and has seen growth in passenger traffic. It is also offering interlining services to several carriers.
The move by AirAsia may just open new transit traffic for the airline, but if it does, the fear of ticket prices going up is a possibility. This is because its cost will be higher and will likely be passed on via higher ticket prices.
With AirAsia leaving for KLIA, KLIA2 will virtually lose its major tenant. MAHB will have to think of how to keep the mammoth building that was built at a whopping cost of RM4bil going.
Surprise move: AirAsia is considering moving its operations to KLIA as early as Jan 1. (Pic shows AirAsia Bhd. aircraft standing next to boarding gates at Kuala Lumpur International Airport 2 (KLIA2) in Sepang, Malaysia)" (Default Alternate Text: "Surprise move: AirAsia is considering moving its operations to KLIA as early as Jan 1
IT does come as a surprise that AirAsia Bhd may want to move its operations to KL International Airport (KLIA).
This is a terminal it did not want to operate in just a few years ago because of the cost factor. Being a low-cost airline, cost is its biggest factor and what it wants is a bare-minimum terminal that allows it to price its fares affordably for mass appeal.
However, it looks like the circumstances have changed with the latest revision done to the passenger service charge (PSC).
Now, it wants to consider moving to KLIA as early as Jan 1 because it feels there is no real distinguishing factor between both terminals when it comes to the PSC.
On Monday, AirAsia Malaysia CEO Aireen Omar challenged Malaysia Airlines Bhd (MAS) CEO Peter Bellew to move to KLIA2, as he had earlier said that he would move some flights to KLIA2 as he found “KLIA2 to be a much better airport”.
She said AirAsia was happy to swap airports with MAS, more so since the PSC is more equalised and the move would provide the airline passengers the better comfort they deserve.
The reason why MAS wanted to move some of its flights to KLIA2 was because of the US$8 price advantage KLIA2 offered in the PSC.
Surprisingly, now MAS is sitting firm at KLIA, as Bellew said on Monday that the need does not arise. Instead, he said the revised rates did create an opportunity for MAS to compete on a level playing field in the country, as it fights for every dollar and cent in savings where possible.
At this stage of its life, MAS is fighting to return to the market after losing market share caused by the twin air disasters in 2014.
The new PSC rates come into effect on Jan 1 and the gap in pricing between the two terminals has been narrowed and would likely be equal by Jan 1, 2018.
For domestic travel, it has been standardised at RM11, for international travel, the rate is up 3% to RM73 at all airports, but at KLIA2 it rose 56% to RM50.
There is one uniform rate for Asean at RM35, which the International Air Transport Association (IATA) felt would distort the market.
To IATA, the regulator has taken “half a step forward. While we welcome the equalising of the PSC for domestic and Asean flights, we are disappointed that it was not done for all the PSC at KLIA”.
Malaysian Association of Tour and Travel Agents president Datuk Hamzah Rahmat also feels there is no justification to pay more if travellers are getting the same poor standard of service in many airports. That is the job of the regulator to watch out for so that the PSC rates commensurate with services provided, and if it is not, then it should be brave enough to impose penalties.
At RM73, KLIA’s PSC is no longer the cheapest in the region. It is slightly higher than Indonesia and Hong Kong airports’ PSC, but lower than Bangkok and Singapore charges.
Airport operator Malaysia Airports Holdings Bhd (MAHB) welcomes the switch as to it both the terminals, KLIA and KLIA2, are part of the same airport network system. AirAsia is scheduled to meet it on Monday over the issue.
The whole issue of switching terminals stems from the US$8 price advantage that KLIA2 offers at current PSC rates. That factor is much reduced with the new rates.
Switching airports is nothing new for airlines. They do it to best suit their business model. For travellers, if indeed AirAsia moves to KLIA, it would be good for international connections, as KLIA offers better comfort by way of passengers not having to walk miles on different terrains to reach their gates.
Malindo Air is an example of an airline that switched to KLIA and has seen growth in passenger traffic. It is also offering interlining services to several carriers.
The move by AirAsia may just open new transit traffic for the airline, but if it does, the fear of ticket prices going up is a possibility. This is because its cost will be higher and will likely be passed on via higher ticket prices.
With AirAsia leaving for KLIA, KLIA2 will virtually lose its major tenant. MAHB will have to think of how to keep the mammoth building that was built at a whopping cost of RM4bil going.
