Malaysian Association of Tour and Travel Agents (Matta) is alarmed by the huge increase in fees to be imposed by the Department of Civil Aviation Malaysia (DCA) on airlines from April 15.

Matta president Datuk Hamzah Rahmat said the timing is not right as “the market is still very soft”.

“Our target of attracting 30.5 million visitors this year may be derailed if air ticket prices go up and the number of flights goes down,” he said.

Hamzah said high fees would deter airlines from increasing flight frequency and new carriers from coming in.

“Yield management is not confined to increasing rates but gathering maximum revenue, which would suffer from fewer flights, he explained.

“In the worst-case scenario, it could cause existing airlines to pull out of Malaysia,” he added.

Last year, there were 1,716,064 fewer visitors compared to 2014.

"Local tourism will take a big hit as 60% of arrivals to these two states (Sabah and Sarawak) are by air," says Datuk K.L. Tan.  Photo: Filepic

“Local tourism will take a big hit as 60% of arrivals to these two states (Sabah and Sarawak) are by air,” says Datuk K.L. Tan. Photo: Filepic

According to Matta inbound vice-president Datuk K.L. Tan, the 6.3% drop in visitor arrivals last year meant a loss of RM2.9bil in tourism receipts.

While he concedes that this affects foreign exchange, the issue posed a greater problem to residents of Sabah and Sarawak.

“If domestic airfares were to be increased, the people of Sabah and Sarawak will be severely affected as they are dependent on air travel to the peninsular on essential matters, such as education, medical treatment, business and employment,” Tan explains.

“Local tourism will take a big hit as 60% of arrivals to these two states are by air,” he added.

Air ticket price consists of airfare plus taxes, fees and charges (better known as TFC in airline lingo).

Matta ticketing vice-president Zarinah Hashim said even if airfares remain the same, the ticket price can go up, with an increase in TFC charges.

“The DCA should treat airlines as customers, engaging with them frequently and, if need be, increase fees on a staggered basis as no industry should be jolted unnecessarily,” she concluded.