IATA criticises different tax rates at budget airline terminals
August 6, 2007
The International Air Transport Association on Monday criticised Malaysia’s move to cut departure tax at its two budget airline terminals, saying it was discriminatory to other carriers and warning it could hurt tourism in the country.
In June, departure tax for international passengers at the Low Cost Carrier Terminals, or LCCT, in Kuala Lumpur and in Kota Kinabalu was dropped by up to 51 percent to RM25 (US$7.40; euro5.40).
The rate already incorporates security charges.
The rate for domestic flights was cut by 33 percent to RM6 (US$1.78; euro1.30).
At the Kuala Lumpur main terminal and other airports nationwide the departure tax for international passengers remains at RM51 (US$15.10; euro11.03).
For domestic travelers, the tax is RM15 (US$4.44; euro3.24).
The Geneva-based IATA, the governing body which regulates international air transport, said its member airlines have been dealt a cost disadvantage by the lower tax charges at Malaysia’s LCCTs.
IATA director general Giovanni Bisignani has written to Prime Minister Abdullah Ahmad Badawi to call for a level playing field for all airlines operating in Malaysia, the body said in a statement.
IATA member airlines account for 90 percent of Asia Pacific traffic and play a key role in Malaysia’s economy through employment opportunities and the wider benefits of aviation and tourism, Bisignani said in the letter.
“The discriminatory charges scheme distorts competition and hinders the growth of IATA member airlines, resulting in sub-optimal benefits to Malaysia and a negative impact on efforts to promote tourism,” he said.
Bisignani also said such discriminatory practice goes against the rules of the International Civil Aviation Organization to which Malaysia is a signatory, and called for it to be immediately removed.
“All airlines and their passengers should be offered the same level of charges and incentives in order to maximize growth,” he added.
Malaysia has said it cut the tax rates as part of efforts to become a regional hub for low cost carriers in Asia.
It hopes to woo more carriers to its low-cost terminals, which are currently used only by Southeast Asia’s biggest no-frills carrier AirAsia and by the Philippines’ Cebu Pacific.
Malaysia faces stiff low-cost airline and terminal competition from Singapore and Thailand. – AP
This article is a verbatim copy of the original article from The Star.