AirAsia’s bid to halt RM40.6m PSC payment until appeal heard fixed for Sept 27

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KUALA LUMPUR (Aug 9): AirAsia Group Bhd's application for a stay of execution of last month's summary judgment for it to pay RM40.6 million in passengers service charge (PSC) it owed to Malaysia Airports (Sepang) Sdn Bhd, has been fixed to be heard on September 27 by the High Court here.

This follows case management of the case today before High Court deputy registrar Norliza Hussin in her chambers.

This was revealed to theedgemarkets.com by Malaysia Airports Holdings Bhd (MAHB) lawyer Datuk Lim Chee Wee.

The stay of execution sought by the carrier is to stop it from paying the amount until its appeal is heard.

It is understood that AirAsia had already filed a notice of appeal to Justice Azimah Omar's decision at the Court of Appeal.

It was reported on July 18, that Justice Azimah had dismissed the airline's striking out application of the three suits filed by Malaysia Airports and allowing summary judgments be entered on the budget carrier.

“I allow order in terms with regard to Order 14 (Rules of High Court, regarding summary judgments).

"The court rules that under Section 46 of the Malaysian Aviation Commission Act 2015 that the power to set charges lies with the Malaysian Aviation Commission (Mavcom) while Malaysia Airports (MAHB) is the body issued the licence to operate the airport. I am allowing Order 14 on all three cases," the judge said in her oral judgment and ordered AirAsia to pay total costs of RM24,000 for all three suits.

Accordingly, AirAsia was ordered to pay MAHB the RM40.6 million in PSC charges it owes following the carrier's refusal to collect the full PSC of RM73 imposed by the airport operator on international departures from klia2.

A summary judgment under Order 14 is a court procedure used when the defendant does not have any defence to the claim.

It was reported that AirAsia has only been charging RM50 per passenger on its flights as it feels klia2 passengers should not be paying the same PSC as those departing from Kuala Lumpur International Airport, which AirAsia deems is more superior in terms of facilities and service quality.

In its defence, AirAsia applied for MAHB's lawsuit to be struck out, arguing that it is frivolous and an abuse of process, given that the airport operator could have followed proper dispute resolution avenues via the Malaysian Aviation Commission (Mavcom) Act 2015.

The gazetted rate of RM73, which was stipulated by Mavcom, is an increase from the RM50 charged previously.

Mavcom said in a statement dated Nov 30, 2017 that effective Jan 1, 2018, the PSC for international destinations beyond Asean at klia2 will be RM73, being the same rate as those at other airports in Malaysia.

MAHB, however, deferred the implementation of the new rate from January to June 2018, and only started implementing it from July 2018.

It was also reported yesterday that AirAsia and its affiliate AirAsia X Bhd (AAX) will start charging a passenger service charge (PSC) of RM73, albeit "under protest", from RM50 currently, for non-Asean international departures from klia2 beginning today (August 9).

"AirAsia will now collect the additional RM23 in PSC, and the differential amount will be clearly indicated in the itemised fare as 'PSC (Under Protest)'," said AirAsia in a statement yesterday.