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Author: Tan KW   |   Latest post: Thu, 25 Apr 2019, 12:34 PM

 

MAHB: ‘We want to have a good relationship with all airlines’

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This article first appeared in The Edge Malaysia Weekly, on March 4, 2019 - March 10, 2019.

 

GIVEN how closely Malaysia Airports Holdings Bhd (MAHB) and AirAsia Group have to work together, one might think the two would be corporate best friends, at best.

But the country’s biggest airport operator and its largest customer — which is also Asia’s biggest budget airline — have long had an openly frosty relationship.

That certainly is not by design, says newly minted MAHB group CEO Raja Azmi Raja Nazuddin Azmi. “We want to have a good relationship with all airlines.”

It is also worth noting that as Raja Azmi navigates MAHB through unprecedented structural upheavals in the airline industry, the on-off feud with AirAsia has also escalated to unprecedented heights under his watch.

Last December, MAHB sued AirAsia Bhd and its long-haul affiliate AirAsia X Bhd for a combined RM36.1 million in uncollected passenger service charges (PSC) for international departures since July 1, 2018.

In late January, AirAsia counter-sued MAHB, seeking RM400 million in damages and losses allegedly resulting from subpar airport services and facilities.

For many long-time observers of the industry, the legal fight is the culmination of a long-running saga between the two as far as the PSC is concerned.

AirAsia has long pushed for lowering the PSC whereas MAHB has argued that the PSC was low until the recent multiphase increase pushed through by the Malaysian Aviation Commission (Mavcom).

And the tussle between two key players has raised eyebrows and alarmed investors, including the Employees Provident Fund (EPF), a substantial shareholder in both MAHB (10.56%) and AirAsia Group (5.64%).

EPF has written to both parties imploring them to settle the matter amicably and met with AirAsia in early February. It is learnt that a meeting with MAHB is expected this week.

Will MAHB consider an out-of-court settlement with AirAsia? Raja Azmi declines to comment. “Let the process take its course.”

However, he stresses that the lawsuits does not affect the day-to-day working relationship between the two parties. MAHB, as the airport operator of 39 airports nationwide, remains fully supportive of AirAsia’s operations.

“We know where the line is. It could have been any other airline (that MAHB has disagreements with),” says Raja Azmi.

 

In no hurry to sell foreign operations

On the international front, the big question mark for MAHB is whether the partial sale of its wholly-owned Istanbul Sabiha Gokcen International Airport (ISG) will still proceed. Last August, Turkish Airlines reportedly bid €750 million for an 80% stake in ISG, though no transaction materialised in the end.

“The short answer is we are in no hurry to sell. Nothing will happen until the Turkish elections (in June 24) are over,” says Raja Azmi.

Meantime, MAHB is still keen on disposing of its entire 11% stake in GMR Hyderabad International Airport Ltd. On Feb 2 last year, MAHB had agreed to sell the stake to GMR Airports Ltd for US$76.05 million (RM318.57 million), but the deal lapsed after GMR Airports failed to complete its obligations by Dec 31, 2018.

 

https://www.theedgemarkets.com/article/we-want-have-good-relationship-all-airlines

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