SEPANG: AirAsia Group Bhd (AirAsia) is adamant on its refusal to increase the airport tax charged on passengers departing from klia2 on behalf of Malaysia Airports (Sepang) Sdn Bhd (MASSB), a subsidiary of Malaysia Airports Holdings Bhd (MAHB). In reference to the Writ of Summons served to AirAsia X Bhd (AAX) and AirAsia, by MASSB, […]
KUALA LUMPUR, Dec 14 ― Bursa Malaysia closed broadly lower today, in tandem with the downtrend in regional bourses prompted by continued weak market sentiment and re-emerged risk aversion which curbed interest for equities, dealers…
KUALA LUMPUR, Dec 14 ― The reinstatement of the cabotage policy and dealing with freight losses worth billions due to cargoes transported by foreign vessels were among the major issues discussed during the recent…
PETALING JAYA: Low-cost carrier AirAsia has paid a total of RM478.06 million in airport tax to Malaysia Airports (Sepang) Sdn Bhd (MASSB) to date, but stressed that it is not obliged to collect the additional charges.
AirAsia Malaysia CEO Riad Asmat said in statement today that the airline has been collecting on behalf of MASSB, RM50 airport tax or passenger service charge (PSC) from every non-Asean international passenger departing from klia2 since Jan 1, 2017.
MASSB raised the PSC charged on non-Asean international passengers departing from klia2 to RM73 on Feb 1, 2018, in a move to equalise the PSC between klia2 and KL International Airport (KLIA).
Riad reiterated the airline’s stand, saying that it is not obligated to collect airport tax for MASSB, and has refused to collect the additional charge from passengers on behalf of MASSB.
“Passengers using klia2 should not be charged the same rates as passengers in KLIA, as klia2 is a low-cost terminal with far lower levels of service provided to passengers, compared with KLIA, which is a full-service terminal,” he said.
He said AirAsia had also previously lodged a number of official complaints regarding the substandard infrastructure and access at klia2, which has negatively impacted its operational performance and punctuality.
The complaints include unsatisfactory state of infrastructure at klia2, apron defects, ground depression, flooding, ruptured fuel pipelines, ad hoc runway closures due to continuous resurfacing requirements, closure of departure gates and damages to aircraft.
Riad said these cross-claims far exceed the amount of airport tax that the airline has refused to collect for MASSB from its passengers.
“It is to be reiterated that we have tried, on various occasions, and without success, to engage MASSB on these issues. Regrettably, MASSB has instead decided to take the matter public and instigate legal action based on claims that AirAsia will strongly refute,” he added.
Earlier on Tuesday, AirAsia Group Bhd and AirAsia X Bhd told Bursa Malaysia that they are being sued by MASSB for refusing to collect the additional RM23 PSC per passenger at klia2, with MASSB claiming a combined RM36.11 million for uncollected PSC and alleged PSC arrears.
The group had said that it will defend the proceedings vigorously as it believes that the claims were made without justification and are unreasonable.
The airline refused to collect the additional RM23 PSC per passenger, stressing that the charges levied should reflect the level of services provided.
KUALA LUMPUR, Dec 13 — Bursa Malaysia closed firmer for the second consecutive day, in tandem with the uptrend in regional bourses, prompted by the easing trade tension between the United States and China which spurred investors…
FRANKFURT AM MAIN, Dec 13 — The European Central Bank is widely expected to end today the “quantitative easing” (QE) programme that has seen it pump €2.6 trillion (RM12.4 trillion) into the eurozone economy to stoke growth and inflation. But…
KUCHING: AirAsia X Bhd’s (AAX) net gearing ratio is expected to remain manageable even if it has to pay the summons issued by Malaysia Airports Holdings Sdn Bhd (MAHB) for the uncollected international passenger service charges (PSC), analysts say. Of note, on Tuesday, AirAsia Bhd (AirAsia), AAX’s wholly-owned subsidiary, with a Writ of Summons in […]
PETALING JAYA: The RM26.7 million claim by Malaysia Airports Holdings Bhd (MAHB) from AirAsia X Bhd (AAX) for uncollected passenger service charges (PSC) will not have any material impact on the airline’s operations.
“In the event that AAX would have to reimburse the RM26.7 million worth of uncollected PSC to MAHB, the impact would not be material to AAX’s day-to-day operations as the company has generated a net operating cash flow of RM47.3 million on average for the past three quarters. Moreover, AAX has a net gearing which is still manageable, remaining below 0.7 times after considering such payments to MAHB,” MIDF Research said in its report.
On Tuesday, AAX told Bursa Malaysia that it was served with a writ of summons by MAHB worth RM26.7 million for uncollected PSC since July 1, 2018, which is in relation to the RM23 additional charge per passenger for international passengers since AAX has only been collecting RM50 instead of RM73 per passenger.
MAHB stated that same rates should apply to both klia2 and Kuala Lumpur International Airport (KLIA). However, AAX reiterated its stance that klia2 is a low-cost airport and the charges levied should commensurate with the level of services provided.
“Future adherence to the full PSC could push average fares upwards to sustain margins but we believe this will be partly mitigated by AAX’s prudence in shifting some of the future capacity into other core markets namely, Japan, South Korea and India to factor in the slower growth from the China segment,” said MIDF Research.
It noted that a re-rating catalyst for AAX would be the possible equal downward revision of PSCs for klia2 and KLIA without any plans to reverse out any previous charges according to the Malay-sian Aviation Commission (Mavcom).
It maintained its “neutral” call on the stock with an adjusted target price of 22 sen per share.
Meanwhile, AirAsia Group Bhd’s (AAGB) deal with Castlelake LP indicates AAGB’s aspirations to invest in shifting from being asset-heavy to being more digitally focused.
“Operationally, AAGB has partnered with Airbus and Palantir to establish an integrated Big Data platform which includes forecast of predictive maintenance and efficient scheduling of parts with a potential saving of US$40,000 per aircraft per year,” said MIDF Research in a separate report.
On Tuesday, Reuters reported that Castle-lake, a US private investment firm, has signed a deal to acquire about 30 narrowbody planes from AAGB for about US$800 million (RM3.34 billion).
The deal entails the purchase of AAGB’s older aircraft, which are under lease to AAGB’s affiliated airlines and is expected to be concluded in a few weeks.
“Previously, management noted that there will be a net addition of 24 aircraft in FY19. Taking into consideration the sale of 30 aircraft to Castlelake, there would be a net reduction of AAGB’s fleet (including other AOCs) by six aircraft. As such, we expect aircraft utilisation across AAGB in FY19 to increase above the 2.2% recorded for 9MFY18,” MIDF Research said.
If the acquisition is satisfied via cash, AAGB’s cash pile would increase to about RM7.77 billion, translating into a net cash position of about RM4.57 billion. Meanwhile, the writ of summons by MAHB to AAGB worth RM9.4 million is only less than 1% of its cash pile and FY18F/FY19F earnings.
“Therefore, AAGB’s financial health will not be adversely impacted in the event that AAGB has to reimburse the monies owed to MAHB,” it added.
It maintained its “buy” call on AAGB with an unchanged target price of RM3.48 per share.
AAGB shares were down 10 sen or 3.8% to RM2.54 today, while AAX declined half a sen or 2.1% to 23 sen.
PETALING JAYA: Prestariang Bhd said its subsidiary Prestariang SKIN Sdn Bhd (PSKIN) has received a letter from the government dated Dec 11, confirming the Cabinet’s decision to terminate the RM3.5 billion Immigration Department’s National Immigration Control System (SKIN) project by way of expropriation.
The termination takes effect on Jan 19, 2019, the group said in a filing with Bursa Malaysia .
Prestariang shares closed unchanged at 29 sen today after it came under strong selling pressure with a loss of 36.3% on Monday and Tuesday after Home Minister Tan Sri Muhyiddin Yassin’s remarks that SKIN had been cancelled in order to make way for a new system.
Prestariang reiterated that its unit was not in default of any conditions of the concession agreement (CA) and it is entitled to compensation in accordance with the formula set out in the CA. It will enter into discussions with the government to settle amicably in the interests of both parties.
Depending on the final amount of compensation, Prestariang said, the termination of the CA may have a negative impact on the group’s 15-month financial period ending March 3, 2019.
However, it said the actual financial impact can only be ascertained once PSKIN’s negotiation and discussion with the government has been concluded.
Prestariang stressed that it has other existing contracts under the technology and talent division which include its software, training and education businesses, which are expected to continue to be sustainable and viable. It is confident on the group’s ability to continue to meet its existing financial obligations.
KUALA LUMPUR: Bursa Malaysia snapped a six-day losing streak by closing firmer today, with the benchmark index moving into positive territory spurred by buying support in index-linked counters such as CIMB and Public Bank, dealers said.
At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 10.64 points to finish at 1,663.27 after fluctuating between 1,656.47 and 1,667.7 throughout the day.
Contributing a total of 6.825 points to the key index, CIMB soared 24 sen to RM5.75 after 13.74 million shares changed hands while Public Bank surged 40 sen to RM24.90 with 2.96 million shares transacted.
Gainers led losers 394 to 371, while 390 counters were unchanged, 750 untraded and 38 others suspended.
Total volume increased to 2.07 billion units worth RM1.94 billion from 1.43 billion units valued at RM1.51 billion recorded yesterday.
Maybank IB Research, in a note today, projected CIMB to record a faster earnings growth of 11% in financial year (FY) 2019.
The higher growth was on the back of more stable net interest margins and credit costs, leading to a recovery in return on average equity to 10% from 9.4% (excluding one-offs) in FY18, it said.
Meanwhile, a dealer said the uptrend on Bursa was in tandem with its regional peers’ performance amid improved market sentiment as investors were upbeat over an easing in trade tensions between the US and China.
Among heavyweights, Maybank eased five sen to RM9.29, Tenaga lost four sen to RM13.50, and Petronas Chemicals slipped one sen to RM9.17, but IHH Healthcare added 11 sen to RM5.60.
Of actives, MyEG shed 17 sen to 84 sen, Bumi Armada gained 1.5 sen to 17.5 sen, while Priceworth was flat at 4.5 sen.
The FBM Emas Syariah Index was 7.08 points better at 11,406.61, the FBM Emas Index improved 51.19 points to 11,435.86 and the FBMT 100 Index edged up 53.59 points to 11,326.89.
However, the FBM Ace Index fell 13.47 points to 4,532.75, and the FBM 70 erased 11.4 points to 13,206.29.
Sector-wise, the Financial Services Index bolstered 151.12 points to 17,289.69 and the Plantation Index bagged 27.96 points to 6,660.48, but the Industrial Products and Services Index eased 0.24 of-a-point to 167.19.
Main Market volume increased to 1.41 billion shares worth RM1.81 billion from 980.18 million shares valued at RM1.41 billion on Tuesday.
Warrants turnover advanced to 390.18 million units worth RM84.56 million from 286.99 million units valued at RM68.08 million.
Volume on the ACE Market widened to 267.68 million shares worth RM38.93 million compared with 161.23 million shares worth RM27.08 million.
Consumer products and services accounted for 1.38 million shares traded on the Main Market, industrial products and services (248.84 billion), construction (75.7 million), technology (337.53 million), SPAC (581,000), financial services (39.03 million), property (88.19 million), plantations (24.69 million), REITs (8.09 million), closed/fund (42,400), energy (289.07 million), healthcare (48.76 million), telecommunication and media (36.05 million), transportation and logistics (50.25 million), and utilities (22.45 million).
The physical price of gold as at 5pm stood at RM161.98 per gramme, down 46 sen from RM162.44 at 5pm yesterday. — Bernama