MAHB resorts to garnishee order over uncollected PSC

This article first appeared in The Edge Financial Daily, on September 11, 2019.

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KUALA LUMPUR: AirAsia Group Bhd said it will take necessary actions “to preserve our interests” after Malaysia Airports Holdings Bhd (MAHB) applied to the court for garnishee orders to execute a judgement on outstanding passenger service charge (PSC).

A garnishee order is a form of enforcing a judgement debt against a creditor to recover money.

On July 18, it was reported that AirAsia will have to pay at least RM40.6 million in unpaid PSC to MAHB’s subsidiary, Malaysia Airports (Sepang) Sdn Bhd (MASSB).

This was after the High Court dismissed AirAsia’s strike out application, and allowed summary judgement against AirAsia by MAHB in the three suits.

In a filing with Bursa Malaysia yesterday, Air Asia said: “MASSB had through its solicitors, filed garnishee execution applications to the High Court to execute the judgement dated July 18, 2019 for, amongst others, the outstanding additional PSC.”

“Further, MASSB had through its solicitors on Sept 6, 2019, served garnishee show-cause orders dated Aug 23, 2019 on three of our company’s banks, directing such banks to set aside certain funds for the purposes of payment of the judgement sums under the said judgement,” AirAsia added.

A similar filing was made with the stock exchange yesterday by AirAsia X Bhd.

The outstanding PSC collection came about after AirAsia refused to collect the full PSC of RM73 imposed by MAHB on international departures from kila2, the second terminal of the Kuala Lumpur International Airport (KLIA).

Instead, AirAsia was only charging RM50 per passenger on its flights as it feels klia2 passengers should not be paying the same PSC as those departing from the main terminal (KLIA), which AirAsia deems is more superior in terms of facilities and service quality.

In its defence, AirAsia applied for MAHB’s suit 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 had announced in late 2017 that effective January 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 to June 2018, and only started implementing it from July 2018.

The transport ministry has further revised the PSC with effect from next month. International travellers flying beyond Asean from klia2 and other airports, except for KLIA, will be charged a PSC of RM50, instead of RM73.