Malaysia Airlines Berhad (MAS) can enjoy lower tax and operate from low cost terminal KLIA2, if it operates as a low cost carrier, said Transport Minister Datuk Seri Liow Tiong Lai.

He said giving lower taxes to low cost airlines had always been government policy in supporting the sector.

"So I don't see why MAS wants to question this at this moment. Unless MAS wants to fly as a low cost carrier so they can enjoy low airport tax.

"In the past, MAS also had a low cost airline, so we welcome MAS to operate a low cost airline," he told reporters after the launch of Perlindungan & Indemniti Malaysia Sdn Bhd (P&I Malaysia), a government-initiated maritime insurance for small vessels, here, today.

He said this in response to MAS CEO Peter Bellew's persistent call for the government to standardise the passenger service charge at both airports.

Bellew had reportedly said MAS is considering to move some of its flights from KL International Airport (KLIA) to klia2 following higher tax imposed at KLIA which had impacted the national carrier's profits.

On the maritime insurance, Liow said the scheme which will be made compulsory, not only will provide necessary protection for small ships of under 300 Gross Tonnes at an affordable premium.

It will also re-position and strengthened the local maritime industry to be more globally competitive, he said.

He estimated that some 10,000 small vessels are currently not insured.

P&I Malaysia which was incorporated in August 2015, provides marine liability for small ships for coverage up to a combined single limit of RM1.4 million.

The scheme covers liability from personal injury or loss of lives for passengers and crew, ship's crew liability, property damage, environment pollution and wreck removal.