Airport charges freeze showcases govt's

The government's move to put on hold the recently approved increases in airport charges by Malaysia Airports Holdings Bhd (MAHB) for an indefinite period, clearly demonstrates its commitment to the recently signed collaboration between AirAsia and MAS. In a research note today, OSK Research said the decision by the Ministry of Transport did not come as a surprise, given the intense lobbying from AirAsia Bhd and Malaysian Airline System Bhd following the sealing of their collaboration agreement early last month. "While the freeze on raising tariff is negative to MAHB, the turn of events demonstrates the government's (Khazanah) commitment to the collaboration," the research house said. On Friday, the ministry put on hold the passenger service charge which was due for an increase from 27 per cent to 28 per cent, effective this Sept 15, while the aircraft landing and parking charges were to be gradually raised up to 30 and 64 per cent respectively. The new passenger service charges were to be borne by the traveling passenger. Under the new rates, the international passenger service charge will increase from RM51 to RM65 at the KL International Airport's main terminal building, Sultan Abdul Aziz Shah Airport Subang, Langkawi International Airport, Penang International Airport, Kota Kinabalu International Airport Terminal 1 and Kuching International Airport. Meanwhile, OSK Research said it is now reverting MAHB's earnings estimate to its previous forecast, in view of the latest development. The research firm had earlier raised MAHB's earnings forecast by two per cent, 11 per cent and seven per cent respectively for financial year 2011, 2012 and 2013. OSK Research maintained its "buy" call on MAHB with a downward revised fair value of RM7.36 from RM8.10.