AirAsia loses appeal against summary judgment over passenger service fees

The Court of Appeal today dismissed the appeals by AirAsia Bhd and AirAsia X Bhd (AAX) to set aside a High Court’s decision granting summary judgment to Malaysia Airports (Sepang) Sdn Bhd (MASSB) regarding the payment of outstanding passenger service charges (PSC).

The decision was delivered by a three-member bench comprising justices Has Zanah Mehat, Azizah Nawawi and See Mee Chun in court proceedings conducted online.

“We find no merit in AirAsia’s appeals against the decision of the High Court in granting the summary judgment,” said Azizah who delivered the court’s unanimous decision.

This upholds the decision by the Kuala Lumpur High Court which ordered AirAsia and AAX to pay RM40.73 million in PSC and RM792,381 in unpaid late payment charges (LPC) to MASSB, a wholly-owned subsidiary of Malaysia Airport Holdings Bhd (MAHB).

The court also dismissed three appeals by AirAsia against the High Court’s refusal to allow the low-cost carrier’s application to strike out the lawsuit filed against them by MASSB.

Azizah ordered AirAsia to pay costs of RM10,000 for each appeal, totalling RM60,000 for the six appeals filed by AirAsia and AAX.

Three concern the High Court’s decision to grant summary judgment to MASSB and the other three were against the High Court’s dismissal of the companies’ application to strike out the lawsuit filed against them by MASSB.

MASSB’s claims against AirAsia and AAX were for unpaid PSC at the rate set by the Malaysian Aviation Commission (Mavcom) under the Mavcom (Aviation Services Charges) Regulations 2016, amended in 2017 and 2018.

In her decision, Azizah said the sole dispute raised by AirAsia was that the new PSC rate stated in the regulations was a ceiling rate instead of a fixed rate.

She said the court agreed with the High Court findings that AirAsia’s actual dispute was not between two aviation service providers but instead between AirAsia and Mavcom as it was Mavcom who prescribed the applicable PSC rate.

Azizah said MASSB merely collects the PSC, adding that AirAsia’s actual dispute was against the decision of Mavcom to equalise the PSC rate between KLIA and klia2.

“Accordingly, AirAsia ought to have addressed its PSC complaint by way of a judicial review against the commission’s (Mavcom’s) decision to increase the rate,” she said.

Azizah said it was crystal clear that the current PSC rate was set at RM67, adding that there was nothing to suggest that the rate was a ceiling rate as claimed by AirAsia.

MASSB was represented by lawyers Ivan Loo, Shannon Rajan, Eric Gabriel Gomez and Laarnia Rajandran while AirAsia was represented by lawyer Steven Thiru.