KUALA LUMPUR (Aug 5):  Shares in low cost carrier AirAsia Group Bhd and its associate AirAsia X Bhd (AAX) fell this morning as it emerged they could still face financial penalties for charging its customers a processing fee when they purchased air tickets via credit card or online banking.

At 9.27am, AirAsia fell 2.09% or 4 sen to RM1.87 while AAX dropped 2.27% or 0.5 sen to 21.5 sen.

This is despite AirAsia announcing last Tuesday  that it would remove the processing fee from October.

The Malaysian Aviation Commission (Mavcom) said starting June 1, it is compulsory for all airlines in Malaysia to remove processing fee in accordance with the Malaysian Aviation Consumer Protection Code 2016 (MACPC).

In June, it was reported that the aviation regulator had issued several show-cause letters to airlines that had failed to comply with the new code. Mavcom did not reveal the identity of the airlines.

This morning The Edge Financial Daily reported that Mavcom said it will issue show-cause letter to airlines on violation of the MACPC, requesting for the reply to be in writing.

“The commission will then determine whether the airline has contravened the said provision of the MACPC. Prior to determining the quantum of the financial penalty, the airlines shall be accorded with the opportunity to provide mitigating factors within 14 days,” it said in an email response.

The commission said nevertheless, the decision on whether it will impose penalty on such violation will be dependent upon the findings of the evaluation of the alleged contravention.

“It is compulsory [for airlines to remove processing fee]. As stated in the MACPC, airlines must disclose the final price of airfare both at the point of advertisement and prior to the consumer purchasing the flight tickets.

“The final price must include the base fare and all charges to be paid to the airline, government-imposed taxes and fees, fees and charges prescribed under any written law, as well as fuel surcharge. This in effect eliminates hidden charges, such as card payment charges and administrative fees,” Mavcom added.

Mavcom went on to say that the enhancement to the MACPC was done to ensure that consumers are made aware of the final price of the ticket at the point of selecting the preferred option.