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Analysts puzzled over MAHB’s move to increase airport tax

Saturday August 13, 2011

A hike in airport taxes by Malaysia Airports Holdings Bhd (MAHB) have left analysts mystified, given the synergies sought from the tie-up between the operations of Malaysia Airlines (MAS) and AirAsia Bhd.

Analysts, however, point out that the move to raise airport taxes would be positive to the bottomline of MAHB and stops the compensation for such taxes paid by the Government to MAHB.

“The move to hike passenger service charges doesn’t make sense, when airlines are cooperating to have more economies of scale and MAHB is looking to hike up charges for international travellers,” said an analyst with a local research house. “That just defeats the purpose,” the analyst added.

Khazanah is the single largest shareholder of MAHB with a 54% stake, but it has only two board representatives namely Ahmad Jauhari Yahya, former managing director of Malakoff Bhd, and Mohd Izani Ghani, chief financial officer of Khazanah. The 11-member MAHB board comprised mainly of representatives of the ministries of transport and finance.

Another analyst said although the management had not made any official announcement on the hike starting from Sept 15, industry sources said the hike was almost confirmed.

In a research note yesterday, HwangDBS Vickers Research said the increase in the passenger service charges (PSCs) at the low cost carrier terminal was positive for MAHB, given that the new charge of RM32 will be higher than the benchmark PSC of RM25.

HwangDBS said the move would mean an upward revision to its forecast of MAHB’s earnings by 8% for the company’s 2013 financial year. It was reported that MAHB will be raising the PSCs for international travellers at all airports to RM65 excluding the LCCT (low cost carrier terminal).

“The increments will bring the new PSC to the benchmark level of RM65 as per the operating agreement signed between MAHB and the Government in February 2009.”

This article is a verbatim copy of the original article from The Star.

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