Malaysia Airports Aims To Reclaim $10 Million Debt From AirAsia

Malaysia Airports (MAHB) aims to reclaim around $10 million in debts from AirAsia and AirAsiaX, its long-haul affiliate. The action follows a court victory MAHB had in July against the carriers.

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AirAsia and its long-haul affiliate failed to pay the correct amount of charges to MAHBA. Photo: AirAsia

MAHB filed a garnishee execution application against AirAsia and AirAsiaX, as it appears from stock exchange statements, reports Flight Global. An additional court order was served to the banks of the two carriers in August, which instructed them to “set aside certain funds for the purposes of payment of the judgment sums.”

Why did the Malaysian High Court award $10 million to MAHB?

On July 18, the Malaysian High Court ruled in favor of MAHB and awarded the airport MYR40.7 million in unpaid passenger service charges and MYR792,400 in late payment charges, which totals $10 million.

The ruling followed the failed attempt of AirAsia and AirAsiaX to have the case dismissed. The airlines are also due to pay MAHB the PSC rates in conformity with the law.

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The two carriers have flights that depart from both the main terminal and the KLIA2 terminal. Photo: Allen via Wikipedia

What was the original dispute that led to the ruling?

The original dispute relates to a decision of the Malaysian government to equalize passenger charges for passengers departing from the KLIA2 and the main terminal at the Kuala Lumpur International Airport from the beginning of 2019.

AirAsia and AirAsiaX argued that the KLIA2 terminal ais a low-cost facility, and as such the charges should not be equal to those for the main terminal. Their opposition was rejected several times by the Malaysian Aviation Commission regulator.

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AirAsia lost the dispute with MAHB and is to be ordered to settle the debt. Photo: AirAsia

After the two carriers failed to pay the higher charges in accordance with the new rules, MAHB filed a lawsuit against them in December 2018. The ruling today concluded the dispute, with AirAsia and AirAsiaX being ordered to pay the outstanding charges.

AirAsia’ counterclaim approach

Even though it failed to have the case dismissed, AirAsia tried to counterattack with an MYR480 million counterclaim against MAHB filed in January. It was not related to the outstanding charges, but instead, the carriers sought compensation for the economic losses they suffered as a result of the poor service levels at the low-cost KLIA2 terminal.

The counterclaim led to mediation attempts in February, which were unsuccessful. AirAsia operates domestic and international flights to more than 165 destinations from the KLIA2 terminal at Malaysia International Airport.

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Danial Ismail

The picture of the main terminal of KLIA sourced from Wikimedia in the article has a caption that says that “The two carriers have flights that depart from both the main terminal and the KLIA2 terminal”. For your information, both Air Asia and Air Asia X only operate from klia2. They do not operate from the main terminal at KLIA.