This article first appeared in The Edge Malaysia Weekly on May 27, 2019 - June 2, 2019

Last week, a hearing date was set for AirAsia’s judicial review application against the Malaysian Aviation Commission’s (Mavcom) decision not to adjudicate on the airline’s dispute with Malaysia Airports Holdings Bhd (MAHB).

The dispute in question was over uncollected passenger service charges (PSC), which MAHB is claiming from AirAsia Bhd and AirAsia X Bhd. An MAHB unit is named as the second respondent in the judicial review application.

In December last year, MAHB sued AirAsia for RM36.12 million, which represented the total shortfall in PSC collected by both airlines on behalf of the airport operator since July 1 last year.

Effective July 1, the rate for international departures was RM73 per passenger. However, AirAsia refused to collect more than RM50 as it maintained that the facilities and services at klia2 did not justify a higher fee.

The judicial review application against Mavcom means all key players in the local aviation sector — the dominant airport operator, the biggest airline by volume and the market regulator — are now caught in a legal tangle.

On the surface, it is not an encouraging sign as the nation ought to be pouring its energy and resources into growing the sector and boosting tourist arrivals.

Even institutional shareholder the Employees Provident Fund has voiced its concern that the legal tussle between MAHB and AirAsia will adversely affect shareholder value.

That said, it is encouraging that the longstanding PSC dispute has been brought to court as it, and other contentious matters in the sector, had only sparked an unproductive war of words and public grandstanding previously.

At the very least, turning to the courts provides certainty that such issues will be resolved one way or another.

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