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June 29, 2017

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Malaysia high passenger fees risk budget airline hub status: AirAsia

KUALA LUMPUR -- Kuala Lumpur risks losing its status as Asia's busiest low-cost airline hub because high passenger fees could scare carriers away, Tony Fernandes, head of Malaysia's AirAsia said Wednesday.

Fernandes warned regional airports such as Don Mueang in Thailand and Clark in the Philippines would soon been charging less than the 32-ringgit (US$10) passenger fee at the Kuala Lumpur budget terminal used by AirAsia.

"We (Malaysia) are going to lose our competitive edge. Our costs are going up every day," he said at the launch of an AirAsia badminton training academy.

The AirAsia founder urged authorities not to "kill something that is good," as rivals scramble for customers during a global slowdown, and vie for business from China which has a huge number of passengers from the emerging middle class.

Clark is expected to soon cut its fees — levied on each ticket sold — to around US$9, while Don Mueang, Bangkok's second airport which AirAsia is shifting to from Monday, is also expected to undercut Kuala Lumpur.

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