CAAM mulls higher fees on aviation industry services

Azril Annuar
The Civil Civil Aviation Authority of Malaysia’s (CAAM) office in Putrajaya, November 12, 2019. — Picture by Shafwan Zaidon

PUTRAJAYA, Nov 12 — The Civil Aviation Authority of Malaysia (CAAM) is looking at overhauling its industry service charges to meet its increasing budgetary needs and remove its reliance on the Finance Ministry for funds.

Board member Datuk Razali Mahfar told a press conference that some of the current problems they faced, which had contributed to US Federal Aviation Authority’s demotion of CAAM to Category Two was due to their lack of qualified technical personnel, talents and technology.

“Our immediate task is to decouple from the government pay scheme. To do that, we must be self-sufficient. If we are self-sufficient, we can move to the next stage – which is an independent statutory body.

“To achieve that, we must remove the subsidy from the government and still be a self sufficient entity. We must look at the user (industry players) pay. That means the industry must for a certain extent, fund the authority.

“This would be ICAO’s cost recovery model. This is the model we are looking at. We are in the midst of finalising the model and hopefully it should be presented to the government soon,” said Razali.

He explained that currently, CAAM’s revenue is around RM120 million, with RM95 million from air navigation fee charges and RM25 million from regulatory charges but its operational costs is around RM350 million a year.

Another board member, Afzal Abdul Rahim said their engagement have shown that industry players welcomed the potential fee hike – seeing that it will improve CAAM’s service.

“We are looking at our fees and regulatory charges and we have engaging with key players in our country they are quite positive and understand that all other authorities in the world run business on user pay and recovery model,” said Afzal.

He also noted that Malaysia has one of the world’s lowest industry fee charges.

However, despite being financially independent from Putrajaya’s coffers, CAAM as a statutory body must still report to the Transport Ministry.

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