Frankly Speaking: How much is the PSC, really?

This article first appeared in The Edge Malaysia Weekly, on September 2, 2019 - September 08, 2019.
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Last Friday, Transport Minister Anthony Loke Siew Fook announced that the passenger service charge (PSC) for all international departures in Malaysia, except from the Kuala Lumpur International Airport (KLIA), would be reduced from RM73 to RM50 from Oct 1. Passengers who had paid the PSC — also known as airport tax — before that date can make a claim for refunds at airline offices.

The PSC has been under review by the Malaysian Aviation Commission (Mavcom) as part of its Regulated Asset Base (RAB) Framework since 2017. Following the minister’s statement, Mavcom issued a statement later that day that stressed its role under the Malaysian Aviation Commission Act 2015 to determine how the PSC is calculated and the rate at which it is charged.

Mavcom said the RAB mechanism is globally recognised and one outcome will be differentiated charges based on the size, facilities and services provided at each airport. “The commission is in the final stages of completing the exercise. The new rates will be announced in the next few weeks and gazetted for implementation effective January 2020,” it added.

To the public, the two messages would be confusing. Is Mavcom disputing the reduction announced by the minister? The confusion hit the stock market too. Malaysia Airports Holdings Bhd, which collects the PSC as part of its income, plunged by as much as 49 sen or 5.7% last Friday, but recovered slightly towards the close of trading.

Given that this affects travel out of Malaysia, and particularly in the light of the recent shambles caused by the system disruption at KLIA, it is imperative that both parties jointly clarify the situation to avoid further brouhaha.

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