The founder of AirAsia has strongly criticised Airports of Thailand's (AoT) passenger service charge (PSC) hike, slamming the inappropriate timing during the Middle East war and suggesting varying rates for different airports.
The PSC increase for international flights was published in the Royal Gazette, paving the way for AoT to collect an additional 390 baht for a total of 1,120 baht, starting on June 20.
"I want to keep airfares low. If I keep putting up the fare, no one's going to fly," said Tony Fernandes, co-founder of AirAsia and chief executive of Capital A.
He said the group already raised the fuel surcharge by 20%, which still does not fully cover its fuel expenses as they have more than doubled since the US-Iran war started.
The airline decided not to raise its fuel surcharge further as it could hamper travel demand, said Mr Fernandes.
The group has cut flight capacity by more than 20% and moved planes out of its fleets, making its operation more efficient to cover surging jet A-1 fuel prices.
He said the PSC hike will make Bangkok the second-most expensive airport in the region after Singapore, which has already recorded a decline in low-cost airline traffic.
While Capital A understands AoT is seeking more revenue, there are other methods to fund airport investment, said Mr Fernandes.
AoT should seek earnings from other businesses, such as attracting cargo flights and developing maintenance, repair and overhaul (MRO) facilities, he noted.
For instance, Don Mueang airport has the ability to become a new hub for cargo businesses, building new MRO sites and hangars, while other provincial airports could be upgraded, said Mr Fernandes.
The timing could not be worse to hike passenger costs, and blanketing all airports with the same rate is unreasonable as each airport caters to different passenger segments, he said.
Low-cost airlines including AirAsia, which operates at Don Mueang airport, require different airport services than full-service carriers that use Suvarnabhumi airport, noted Mr Fernandes.
"It's time to review how you charge the customer," he said.
"This is not fair to low-cost customers as Don Mueang should be a low-cost airport."
Low-cost carriers are crucial for the tourism sector, bringing massive volume to different destinations across Thailand, said Mr Fernandes.
A high volume of passengers increases spending at airports, boosting their ancillary fees.
Given the government's plan to introduce a new 300-baht tourism tax and consideration of a 1,000-baht exit tax for Thais, he said higher charges now constitute poor timing for the aviation industry.
The airline is not opposed to reducing visa exemptions to 30 days because few tourists stay longer than a month, said Mr Fernandes.
AirAsia is planning to launch a new airline and Capital A will continue to expand its non-aviation businesses, such as licensing its brands to other businesses through AirAsia Next, he noted.
