The government has the right to determine the rates of the passenger service charges (PSC) as it owns the airports, said Transport Minister Anthony Loke.

He pointed out that Malaysia Airports Holdings Bhd (MAHB) is the operator and Malaysian Aviation Commission (Mavcom) is the regulator, and both are government-linked entities.

"All assets are owned by the government. This (PSC rates) is a cabinet decision, not the Transport Ministry. We are not undermining anybody," Loke told reporters after the launch of the Klang Valley Double Track Phase 2 in Serendah, Rawang today.

He also said the lower PSC charges would not affect MAHB earnings.

"This is good news for everyone as we have agreed to lower the charges, which we believe will stimulate the tourism industry," Loke said.

Last Friday, the government announced that the PSC for international flights were reduced from RM73 to RM50 at all airports in Malaysia, except for KLIA, effective Oct 1.

The PSC for Asean flights remains at RM35 and for domestic flights at RM11.

International Air Transport Association (IATA) yesterday said the decision by the government to intervene and lower the PSC charges has undermined Mavcom's credibility and would put KLIA on the losing side compared to other airports.

“The government has also undermined Mavcom’s credibility as a result. Mavcom is the appointed economic regulator for airports and has the mandate and authority to determine airport charges. There is an established process for setting airport charges,” IATA’s regional vice-president for Asia-Pacific Conrad Clifford was quoted as saying.

- Bernama