BUSINESS

MAVCOM'S RAB FRAMEWORK NOT ALIGNED WITH SPV2030 - AIRASIA

07/11/2019 07:04 PM

KUALA LUMPUR, Nov 7 -- The Malaysian Aviation Commission’s (MAVCOM) new Regulatory Asset Base (RAB) framework does not share the government’s Shared Prosperity Vision (SPV) 2030 to create a more equitable, high-income nation, says AirAsia.

AirAsia Group president (Airlines) Bo Lingam said the regulator’s insistence on pushing through certain punitive elements within its framework goes against the spirit of SPV 2030 to create wealth and increase the purchasing power of all Malaysians. 

He said instead of providing more opportunities for all Malaysians and reducing the cost of flying, the RAB would, in fact, keep flying out of reach of many, the opposite of what the government is trying to achieve.

“MAVCOM has consistently stressed on the equalisation of passenger service charge (PSC) between Kuala Lumpur International Airport (KLIA) and klia2, by virtue of both terminals forming a single airport.

“The RAB should be a fair framework if done with the right intention and purpose. Unfortunately, we foresee that cross subsidising between profitable and non-profitable airports will continue under the current RAB proposition,” he said in a statement today.

Malaysia Airports Holdings Bhd (MAHB) reportedly plans to spend RM5.2 billion from 2020-2022, a sizeable portion of which will go towards the new baggage handling system and aerotrains at KLIA.

Lingam said besides the fact that MAHB has not been engaging airlines in airport development including for its planned interlining between KLIA and klia2, AirAsia is highly sceptical of the airport operator’s capability to efficiently complete this huge amount capital expenditure (capex)in this short period of time.

The absence of a detailed business case to justify each capex as well as MAHB's historical capex spending of just RM200-RM300 million per annum do not suggest that they would be able to undertake this size of investment, he explained.

“It is MAVCOM’s responsibility as a regulator to protect the interest of the flying public by ensuring travellers get what they pay for, but it’s clear from their insistence on including this in the RAB that they are oblivious to the mood of the nation,” he added.

-- BERNAMA


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