AirAsia X in legal battle with Malaysia Airports over $8.8m debt
AirAsia X announced on May 3, 2018, it will file a defense in response to Malaysia Airports Holdings claim that the airline owes it US$8.8 million in outstanding airport charges, rent and late payment charges. The carrier denies amassing such debt and says it is ready to battle it out with the airports operator in what is the latest spat between the companies.
AirAsia X, a long-haul low-cost Malaysian airline, says it will defend itself in court against a claim by Malaysia Airports Holdings, the operator of 39 airports in the country, regarding the alleged debts incurred by the carrier.
"The company’s solicitors are of the opinion that Malaysia Airports' claim can be legally defended, and further there are sums to be deducted and set off against charges imposed by Malaysia Airports," AirAsia X stated in a stock market filing, according to ch-aviation.
The airports company’s wholly-owned subsidiary Malaysia Airports filed the lawsuit on April 27, 2018, accusing the carrier of drawing a US$8.8 million debt consisting of US$8.4 million in outstanding airport charges aside of penalties and rent payments.
The company maintains that its legal suit was taken since the airline failed (neglected or, perhaps, refused) to make the payments despite numerous demands. Hence, "The board of the company is of the opinion that it is necessary for Malaysia Airports to pursue the civil suit to best protect its interest," the airports operator stated, according to Malaysian media The Sun Daily.
AirAsia X remains calm in the eye of the storm. "There is no material financial and operational impact on the company as expenses of this nature are in the ordinary course of business and the same have been provided for in the financial statements,” adding that, “There are also no foreseeable losses arising from the claim," The Edge Markets reports.
The airline’s CEO Benyamin Ismail said on May 1, 2018, that the airline has consistently made all payments to the airport operator in monthly instalments. Moreover, Benyamin stated that his airline and parent AirAsia, have placed numerous official complaints regarding dissatisfactory airport facilities and high charges.
Malaysia Airports manages and operates five international, 16 domestic and 18 STOLports. Among these – the Kuala Lumpur International Airport (KUL), AirAsia X’s main base. On July 31, 2015, the carrier served a letter of demand amounting to US$103million on Malaysia Airports Holdings and Malaysia Airports for loss and damages incurred operating from the new terminal at the airport, klia2, as well as from the LCC Terminal.
And then there is the fact that AirAsia X and AirAsia, the largest airline in Malaysia by fleet size and destinations, are both involved in legal proceedings against the very same Malaysian Airports in regard to a ruptured fuel pipe at the klia2 during maintenance work in October 2016, which allegedly caused significant losses to AirAsia X.