Malaysia Airports (MAHB) has defended its decision to sue AirAsia X (AAX) for RM78.2 million ($19 million) in unpaid charges, stating that it is only defending its core interests.
The airport operators’ defence follows a 24 October report in The Star newspaper, which suggested that the airport operator is seeking preferable treatment over other creditors, and that MAHB aimed to “deliver the final nail into AAX, killing it.”
The report followed a 22 October writ of summons and statement of claim filed by Malaysia Airports (Sepang). MAHB says that is wholly within its legal rights and that the funds are required for the upkeep of airports.
Its statement touches on the conundrum facing creditors of airlines laid low by the travel restrictions stemming from the coronavirus pandemic.
“The aviation industry is facing very challenging and difficult times due to the pandemic,” it says. “All airline companies and airports are facing the same prospect in terms of traffic contraction and loss of revenue. While some airline companies have inevitably collapsed due to the extreme business conditions, airports are facing the same extreme conditions.”
It adds, though, that closing airports is inconceivable given that they represent “critical national infrastructure” and to ensure that “the country is not crippled in terms of connectivity.”
The suit comes at an extremely vulnerable moment for AirAsia X. In September, it emerged that BOC Aviation was suing it for $23 million pertaining to the lease of four aircraft – three Airbus A330-300s with AirAsia X and one with Thai AirAsia X.
Then, on 6 October, it proposed an audacious debt restructuring. The plan, if approved, would see unsecured liabilities of some MYR63.5 billion ($15.3 billion) reduced to just MYR200 million payable within the next five years at a 2% interest rate.
MAHB, however, adds that it sees itself as a secured creditor, “and thus has applied to be excluded from this scheme.”
“Agreeing to any haircut to one airline will set a precedent for the rest,” adds MAHB. “Nevertheless, we acknowledge the importance of AirAsia as a key partner and we shall continue engaging them to find the best solution forward.”
AAX, for its part, states that the funds MAHB seeks largely relate to passenger service charges (PSC) it never collected in the first place. For years, the PSC has been one source of bitter disagreement between AirAsia Group and MAHB, specifically after the group moved to the KLIA2 terminal in 2014 from KL’s previous low-cost terminal.
“The alleged RM78 million outstanding amount is largely made up of the RM23 difference per passenger in passenger service charges which was never collected by the airline,” says AAX.
“Furthermore, RM9.2 million of the alleged amount owing is for late payment interest unilaterally and egregiously imposed on AirAsia X for the uncollected PSC”
AAX cites a Ministry of Transport announcement that the PSC would be lowered to RM50 per passengers as its justification for not collecting the additional RM23 PSC from passengers.
It also reiterated AirAsia’s long running irritation with KLIA2.
“Furthermore, the increased charges could not be justified for substandard facilities and services which we strongly believe should not be imposed on passengers with higher fares. We also like to point out that MAHB has yet to pay agreed incentives owed to AirAsia X estimated at RM7.9 million for 2018 and RM6.9 million for 2019.”
AAX also made a call for industry solidarity amid the pandemic.
“As all travel-related industries are the worst-hit sectors due to these unprecedented challenges, we strongly believe that airlines, airports and other travel-related businesses should work closely together to weather these extremely difficult times, come back stronger and make Malaysia the biggest travel hub in the region.”