‘Like saying a budget hotel should charge the same as a 5-star hotel’: Tony Fernandes lashes out after AirAsia ordered to pay RM40m in airport charges

AirAsia Group CEO Tony Fernandes says the carrier “will continue to fight the battle on behalf of all Malaysians and travellers to Malaysia”.
The Straits Times

AirAsia’s Group CEO Tony Fernandes is not backing down.

The Malaysian entrepreneur took his thoughts to Twitter on Thursday (July 18) and Friday, after the Kuala Lumpur High Court ordered the low-cost carrier to pay RM41.5 million (US$10 million) in unpaid charges to Malaysia Airports Holdings Bhd (MAHB).

“I reiterate for 18 years we have battled for the our passengers in Malaysia. Our motto has been ‘Now everyone can fly’. We have always asked for simple facilities with low airport tax,” Fernandes tweeted on Thursday morning.

Emphasising that passengers at the budge terminal should not pay the same airport tax as those at the main terminal, Fernandes said: “It’s like saying Tune hotel – a budget hotel – should charge the same as the Shangri-la hotel, a five star hotel”.

“We will continue to fight the battle on behalf of all Malaysians and travellers to Malaysia,” he added.

Screengrab from Twitter

In a statement on Friday, AirAsia said it was “taken aback” by the ruling. In its statement, the company quoted co-founder Datuk Kamarudin Meranun and Fernandes as saying: “AirAsia strongly believes that the court has erred and we will appeal this decision.”

How the lawsuit began

The back-and-forth between AirAsia and the airport operator began in December last year, when MAHB sued AirAsia for outstanding passenger service charge (PSC) fees, which it said amounted to an average of about RM7 million per month.

In January, AirAsia counter-sued the airport operator for “losses and damages experienced by AirAsia and its long-haul sister airline AirAsia X Berhad due to operational disruptions at Kuala Lumpur International Airport 2 (klia2).”

Read also: Tony Fernandes says AirAsia will no longer collect KLIA2 fees, and wants compensation for ‘holes’ on runways

Thursday’s ruling meant that the AirAsia Group and its long-haul unit AirAsia X (AAX) will have to pay a combined amount of RM40.73 million in unpaid PSC, as well as RM792,381.74 in late payment charges, New Straits Times reported.

According to the news website, AirAsia is appealing the decision.

Why they are fighting

The feud between the two firms was sparked by AirAsia’s refusal to collect the mandated PSC of RM73 per passenger at klia2. AirAsia has maintained that this is because the budget terminal had lower standards of service from the main airport terminal Kuala Lumpur International Airport (KLIA), and should not be priced the same.

Read also: KLIA2 killed a massive swarm of bees after AirAsia’s Tony Fernandes tweeted a photo, says the insects were just ‘migrating’

In a report, The Edge said AirAsia has been charging each passenger just RM50 in PSC.

But in February, MAHB said that the rates were set by Malaysian Aviation Commission (MAVCOM). MAHB said then that MAVCOM had changed the PSC rate for Klia2 to facilitate fairer competition between airlines in Malaysia, and to reduce discriminatory pricing at the airports.

After the latest ruling, Fernandes reiterated the argument that klia2 was not providing good enough service to carriers and airport users.

In a tweet posted on the same day, Fernandes alleged that one of the issues AirAsia has encountered at the terminal was gates that were “not flat”. The plane caught in this circumstance had to be towed to the gate, he wrote.

He also questioned MAVCOM’s role in looking after passenger interest.

Langkawi airport charged the same as [KLIA]. Klia2 charge the same as [KLIA]. Are they really looking after passenger interests?” he asked.

Screengrab from Twitter

Read also: