Why did Malaysia standardise Asean PSC with international rates?

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Standardisation of Asean PSC Aims to Unify International Departure Charges

The Passenger Service Charge (PSC) for Asean destinations has been unified with international rates, not increased, as part of a revision by the Malaysian Aviation Commission (Mavcom). This standardisation groups Asean travel destinations with other international destinations, affecting the charges collected by airport operators like Malaysia Airports Holdings Bhd (MAHB) and Senai Airport. The primary reason for this adjustment is to ensure airport operators have adequate revenue to manage and maintain airport facilities, which incurs significant operational costs.
Rationale for Unifying PSC Rates

The Ministry of Transport clarified that the PSC is a charge levied by airport operators to cover the costs of managing and maintaining their airports, rather than a tax paid to the government. These operational expenses include essential services such as electricity and water bills, staff salaries, and the overall airport ecosystem. Airport operators rely on revenue generated from PSC as a principal source to sustain their operations, given the high cost associated with managing airport infrastructure.
Details of the PSC Revision

The PSC revisions are set to be implemented for the First Regulatory Period (RP1), commencing from June 1, 2024, and concluding on December 31, 2026. Under these new regulations, the PSC for international travel, encompassing both Asean and non-Asean destinations, has been consolidated into a single international departure PSC. This unified rate will be RM73 for passengers departing from Kuala Lumpur International Airport (KLIA) Terminal 1, and RM50 for those departing from KLIA Terminal 2 and other airports across Malaysia.
Previous and Current PSC Structure

Previously, a distinct, lower PSC rate was applied specifically to Asean travel destinations. The current structure sees Asean departures charged at RM35, while departures to destinations beyond Asean are charged at RM73. The unification means that Asean departures will now align with the broader international PSC rates, simplifying the charging structure and ensuring a consistent revenue stream for airport operators.

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Why did Malaysia standardise Asean PSC with international rates?

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