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This article first appeared in The Edge Financial Daily on July 31, 2019

KUALA LUMPUR: Low-cost carrier AirAsia Group Bhd says it will remove the processing fee for passengers who pay through online banking and credit card from October.

“We still have some charges to drive traffic to cheaper, safer and less fraudless methods. But there will be methods with no fees,” its group chief executive officer Tan Sri Tony Fernandes said in his Twitter post yesterday.

According to Bernama, AirAsia’s processing fee starts from RM4 for passengers using direct debit, and it can go up to RM16 with UnionPay. However, if a passenger opts to make payment using AirAsia’s e-wallet application BigPay, there is no processing fee involved.

In January, AirAsia stopped charging a RM3 fee on its passengers departing from klia2, which it had attributed to its effort to keep fares low.

“The goal has been simple. Make Malaysia a low-cost hub. Hard to fight Bangkok and Singapore in full service. Malaysian airports should really support their No 1 customer [AirAsia] in that dream. We need low-cost airports and low airport tax,” Fernandes said, noting that the airline accounted for 97% of overall passenger traffic at klia2.

AirAsia and Malaysia Airport Holdings Bhd (MAHB) are locked in a legal battle over the passenger service charge (PSC) at klia2 after the airline refused to collect the full amount of RM73 that the airport operator imposed for non-Asean international departures from klia2 earlier this year.

The airline has only been charging RM50 per passenger on its flights as it felt klia2 passengers should not be paying the same PSC as those departing from Kuala Lumpur International Airport, which AirAsia deemed is more superior in terms of facilities and service quality.

But on July 18, a High Court ruling ordered AirAsia to pay MAHB at least RM40.6 million over unpaid PSCs from July to December last year. AirAsia is appealing the decision.

On Monday, AirAsia raised its defensive stance by a notch with a #FairAirportTax social media campaign, noting that the reason why it had not collected the RM23 difference in PSC was to provide its passengers with the opportunity to fly through low fares.

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