Friday 29 Mar 2024
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KUALA LUMPUR (Aug 28): Malaysia Airports Holdings Bhd (MAHB) is considering taking stern action against airlines that have been defaulting on overdue payments.

In a statement, MAHB said it is considering pursuing legal action and refusing to grant authorisation to aircrafts departing the airport until charges are paid.

“MAHB is now considering stronger measures such as issuing Letters of Demand and exercising its statutory rights and remedies, which include recourse under Regulation 177 of the Civil Aviation Regulations 1996 for defaulting airlines which, among others, stipulates that the licensed company may refuse to permit an aircraft to depart from the airport until the charges due have been paid,” the statement read.

MAHB said the overdue payments are mostly related to passenger service charges, a government-regulated charge that the airlines collect in advance from passengers by including it in the ticket prices paid by passengers.

The charge that is payable to MAHB when passengers board their aircraft is used for maintenance, continuous enhancement of facilities and services at the airport, MAHB added.

National carrier Malaysia Airlines Bhd (MAS) and low-cost carrier AirAsia Bhd are the two largest users of MAHB’s airports.

MAHB managing director Datuk Badlisham Ghazali said the company has been closely engaging with defaulting airlines on the collection of the arrears, which include periodic reminders and letters to request payment as well as face-to-face engagement to work out amicable arrangements for payments.

“Many avenues have been explored in resolving the overdue payment issues,” he said. “We hope that the affected airlines will reciprocate with greater cooperation in settling the overdue payments to us.”

MAHB said in striving to maintain a supportive and mutually beneficial relationship with the airlines, it has helped airlines operating at its airports grow by providing over RM450 million in incentives over the years.

MAHB also said its airport charges are also among the lowest in the region.

The airport operator’s balance sheet as at June 30 shows that MAHB’s trade receivables, which includes billed charges for services at its airports, swell nearly 49% to RM903 million from RM606.4 million a year ago.

MAHB’s move comes on the heels of a heated exchange between AirAsia at klia2 over structural problems at the RM4 billion low-cost terminal, which includes a sinking tarmac.

On July 31, AirAsia had served a letter of demand amounting to RM409 million to MAHB and Malaysia Airports (Sepang) Sdn Bhd for loss and damages incurred operating from klia2 as well as from the Low Cost Carrier Terminal (LCCT), both in Sepang.

MAHB denied that it owes AirAsia RM409 million claims in damages at klia2 and the LCCT, saying the claims were not only “wholly unjustified and unsupported by any particulars” but also "misleading and tainted with factual inaccuracies”.

MAHB (fundamental: 0.8; valuation: 2) shares are currently trading up 17 sen or 4.03% to RM4.39, with a market capitalisation of RM7.3 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 
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