Transport Minister Liow Tiong Lai will make the final decision on the new fees the Department of Civil Aviation Malaysia (DCA) has proposed to charge operators of airlines, DCA director-general Azharuddin Abdul Rahman said today.

The decision would be made after the minister listens to the operators, who would make their representations at a final meeting tomorrow, Azharuddin said.

DCA has proposed to impose a new rate of fees and charges from April 15, following 40 years of the fees and charges remaining stagnant.

"The minister will make the final decision on the amount. So, it (DCA’s hike of 10 times) is a proposal, not something cast in stone," he said at a briefing for the media.

The DCA has engaged with the industry players over the hike proposal on a few occasions since April 1 and none of them agreed to the new rates, Azharuddin said.

"We received a number of queries and counter-proposals from the airline operators," he added.

While the industry players have expressed shock over the sudden hike, Azharuddin ( photo ) argued that the hike was proposed after averaging out the fees of countries in the region.

The rates charged in Hong Kong, Vietnam and Thailand would still be higher than the proposed Malaysian rate, he added.

The proposed rate will see the monthly air navigation flight charges (ANFC) of the airlines, which form the biggest cost item for the usage of DCA services, increase from five sen per nautical mile currently to 50 sen for lightweight aircraft.

The ANFC for bigger aeroplanes will rise from 10 to 25 sen per nautical mile to RM1 to RM2.50, Azharuddin said.

Highest portion of an airline's expenditure

The ANFC is the charge imposed on the airplanes that fly over the flight information region covering Peninsular Malaysia, the Adaman Seas, Sabah and Sarawak as well as part of the South China Sea.

ANFC also accounts for the highest portion of an airline's expenditure.

The airlines and their pilots will also be impacted by the rise in various other fees and charges. The fee for an airline operating certificate (AOC) will be increased from RM400 to RM80,000.

Pilots who now pay RM60 and RM100 to renew their flying licences would have to pay RM300 and RM500 after the increase.

Azharuddin argued that DCA, which will be alleviated as an authority body, will play the roles as both an aviation authority as well as a service provider and it therefore needed to be self-sustainable with its revenue.

"The expenditure budget given to DCA is about RM250 million, while our income is only RM50 million. So we have a deficit of RM200 million a year," he stressed.

"We therefore have to upgrade the system in the country, to bring the aircraft safely, seamlessly and efficiently from one destination to another destination."

Azharuddin reiterated that DCA has not reviewed its fees for more than 40 years, but sensed the need for this to be done after realising, three years ago, that the country needed to upgrade its equipments.

"We felt that this is the right time (for fee and charges increases), as we can no longer ask the government to bear the costs. It has to be a 'users pay' concept," he said.

Asked if the airlines would pass the additional costs to the passengers, he said this matter was not under the DCA's purview.

"That's not under our purview. That's up to them (the airlines to decide) on how to deal with the amount increases, whether they want to absorb them or pass them (to the passengers)," Azharuddin added.