The International Air Transport Association (IATA) is urging the Malaysian government to consider introducing incentives or tax credits in the upcoming Budget 2025 to bolster the country's emerging sustainable aviation fuel (SAF) industry.
Dr. Xie Xingquan, IATA's regional vice-president for North Asia and Asia Pacific (ad interim), emphasized the importance of long-term government support and stable policies for research and development in energy transformation, particularly for SAF in Malaysia. He noted that this support is vital for the recovery of the aviation sector, which is on track to fully recover by 2025.
Dr. Xie pointed to the recent launch of the Malaysia Aviation Decarbonisation Blueprint (MADB) as a positive step forward. The blueprint aims for significant decarbonisation targets by 2050, including a 48.2% share for SAF and 30.8% for carbon offsetting.
In addition to SAF support, he urged the government to allocate funds for infrastructure development within the aviation sector. This could include upgrades to existing facilities and new investments, particularly in advanced technologies such as biometric immigration systems. Dr. Xie highlighted the recent enhancements to Kuala Lumpur International Airport's automated people mover system and baggage handling system as beneficial moves.
Another critical area of focus is developing a skilled workforce to meet the industry's needs. Dr. Xie called for increased funding to enhance training capabilities and ensure Malaysia has adequate qualified personnel.
Furthermore, he urged the government to exempt non-Malaysian airline crew from the tourism tax if they operate exclusively in Malaysia. This measure could reduce operational costs for airlines and encourage the expansion of services, improving Malaysia's air connectivity.
Syed Ali Shahul Hameed, group CEO of Berjaya Land Bhd, echoed IATA's call for targeted incentives in Budget 2025, including tax relief and financial support to encourage the adoption of green technologies. He emphasized the need for regulatory guidance and capacity-building programs to help airlines navigate sustainability challenges while maintaining passenger safety.
Shamsul Kamar Abu Samah, CEO of National Aerospace Industry Corporation Malaysia (Naico Malaysia), suggested the implementation of a certification system for airlines committed to sustainability. He also advocated for stricter environmental standards, such as carbon emissions caps, to motivate airlines to develop comprehensive sustainability action plans.
The upcoming Budget 2025 will be crucial for shaping the future of Malaysia's aviation industry, particularly in fostering sustainable practices and infrastructure development.
