Possible delay in airport charges hike

KUALA LUMPUR: The landing and parking rate hikes at Malaysia Airports Holdings Bhd (MAHB) airports may be deferred or reviewed, according to a report by Hwang DBS Research yesterday.

The research house said the delay or review followed the recent tie-up between Malaysian Airline System Bhd (MAS) and budget carrier AirAsia Bhd. To enforce the collaboration, the main shareholders of both airlines — Khazanah Nasional Bhd, which owns 69% of MAS, and Tune Air Sdn Bhd, which owns 23% of AirAsia — swapped shares.

“Nevertheless, if it materialises, the 9% and 18% increase in landing and parking charges per annum respectively could result in a minimal 1% decline in AirAsia’s FY12 to FY13 earnings.

“We understand that AirAsia spent about RM40 million on landing and parking last year, which was only 2% of its total operating costs,” said the research firm.

Responding to The Edge Financial Daily query, a top official at MAHB did not deny or confirm the possible delay in the increase in charges,but said: “It has been gazetted pursuant to Cabinet approval.”

HwangDBS noted that AirAsia will be charging a RM10 fee per passenger for check-in via conventional check-in counters for flight bookings made from Sept 21 onwards, which will encourage passengers to do their own check-in via web, mobile or kiosk.

“We believe this will help AirAsia to reduce traffic at the check-in counters and potentially cut costs by reducing the number of counters as more and more passengers shifted to self check-in,” said the research house.

HwangDBS does not expect the charges to significantly affect AirAsia’s passenger growth, given that the fee is optional and it only accounts for a small fraction of the average fare of RM164.

Therefore, should passengers continue with counter check-ins, which is around 40% of total passengers currently, and with no additional costs incurred, AirAsia’s FY11 and FY12 earnings could be raised by 3% and 13% respectively.

In a separate announcement yesterday, AirAsia said its load factor improved to 82% in July from 79% a year ago. The budget carrier also carried 19% more passengers at 2.65 million in July.

The airline’s available seat per km was up 18% at 3.83 billion and revenue passenger kilometre improved by over 20% to 3.12 billion.

AirAsia is scheduled to release its 2Q11 ended June 30 results on Tuesday. Analysts expect the quarter to be weaker compared with the same period a year ago.