Regulator justifies steep hike in aviation-related fees
Published on: Tuesday, February 13, 2024
By:
FMT, K Parkaran
Last year, the Civil Aviation Authority of Malaysia announced its intention to increase aviation-related fees thrice over the next six years.
PETALING JAYA: Malaysia’s civil aviation regulator has confirmed its intention to hike fees in multiple segments of the industry, despite complaints from various quarters that the proposed increases are too steep.
Come 2025, it will cost more to renew certificates and licences for unmanned aircraft systems. Fees for flying schools, air control services and companies that maintain planes will also be increased.
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The Civil Aviation Authority of Malaysia (CAAM) defended its decision in an advisory when answering 246 concerns raised by stakeholders.
CAAM said the revised rates were based on the principle of cost recovery in line with the government’s aim for it to be a self–financing entity and no longer reliant on state funding.
Acknowledging that any increase will have an impact on the operational costs of companies in the industry, CAAM insisted that the hike was “justified and timely”.
“The implementation of the new fees and charges will only take effect from Jan 1, 2025. Hence the early information to all stakeholders in order to help them in their financial planning,” the advisory read.
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CAAM had in October announced that the increase in fees will be carried out thrice over the next six years.
It said the final proposal, which is subject to approval by the transport ministry, has already taken into account feedback from all stakeholders.
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One of the major concerns raised by airlines and flight training schools is the steep hike in the levy on aircraft that fly through the country’s airspace, known as Route Air Navigation (RAN) fees.
According to CAAM, one of the stakeholders said the proposed fee increase of 297% in 2025, rising to 454% in 2028, and 566% by 2031, would be unsustainable for small flight training organisations still recovering from the financial impact of the Covid-19 pandemic.
“The increase would threaten their viability. To mitigate the impact, they will need to raise their course fees,” the respondent said, citing the unique challenges faced by both small and large industry players, and pleading for a deferral until the matter can be discussed at a forum.
One major airline operator said although the current RAN charges are among the lowest in the region, the new rates would dramatically increase its cost of operations, given its high volume of flights.
Aerodrome-related charges
One operator raised concerns over the revised fees for renewal of aerodrome operations certificates, saying the new rates will impose a substantial financial burden on them.
“This will add to the increase in cost of operating an airport which could lead to the companies reducing services and raising their fees.
“The increment is not justifiable and is too high. This would have a negative impact on airport operators, the aviation industry, and the Malaysian economy as a whole,” it said.
An operator of a short take-off and landing airport (STOLport) complained that the proposed charges do not differentiate between the four categories of airports based on size and air traffic volume.
It said STOLports presently do not pay certification charges, and introducing a RM30,000 fee would be burdensome for these airports that typically serve remote communities and operate primarily based on corporate social responsibility.
“Most STOLports are not making a profit. Imposing higher charges on them would add to their financial burden, potentially leading to operational challenges or even closures,” it said.
In response, CAAM said the new rate had assessed charges based on the number of runways each airport has.
“The more runways an airport has, the higher the fees. As for STOLports and heliports/helidecks, the fees are set to be lower.
“However, certification and safety oversight activities for all airports are required to be performed with the same regulations and standards, with a certain number of resources and efforts from CAAM,” it said, adding that all concerns will be brought up to the ministry before the revised fees are finalised.
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