This article first appeared in The Edge Financial Daily on January 21, 2020

KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) has imposed financial penalties on AirAsia Group Bhd, AirAsia X Bhd (AAX) and Malaysia Airports Holdings Bhd (MAHB) subsidiary Malaysia Airports (Sepang) Sdn Bhd (MA Sepang), which manages the Kuala Lumpur International Airport (KLIA) and klia2.

Mavcom said the penalties imposed on AirAsia and AAX, amounting to RM2 million each, were due to the airlines’ continued charging of credit card, debit card and online banking processing fees separate from their base fares, in contravention of the Malaysian Aviation Consumer Protection Code 2016 (MACPC), for the Aug 10-Sept 11 period last year.

Mavcom’s move comes even as the government has decided to dissolve the commission and transfer its functions to the Civil Aviation Authority of Malaysia.

In a statement yesterday, Mavcom said this is the second time AirAsia and AAX have been found to be not in compliance with this MACPC requirement.

MA Sepang, on the other hand, was penalised RM856,875 due to its failure to meet Mavcom’s Airports Quality of Service Framework (Airports QoS Framework) targets during the second quarter of last year.

The MACPC came into force on July 1, 2016, with amendments that took effect on June 1, 2019 to further protect consumers’ interests.

One of the amendments imposes disclosure requirements for airline fares.

Mavcom had in September 2019 imposed financial penalties of RM200,000 each for AirAsia’s and AAX’s first contravention of the disclosure requirements for charging credit card, debit card and online banking processing fees separate from their base fares for the June 1-Aug 9 period of that year.

As both AirAsia and AAX have been found to contravene the same provision of the MACPC again, even after the imposition of financial penalty for their first non-compliance, Mavcom said it has decided to impose both airlines a penalty of RM2 million each, being 10 times the financial penalty imposed in September 2019.

Mavcom noted that the Airports QoS Framework, which came into effect at both KLIA and klia2 on Sept 1, 2018, was introduced to ensure that airport operators provide consumers good standards of infrastructure and services at airports.

“Mavcom found that MA Sepang failed to meet several requirements of the Airports QoS Framework during the period of April 1, 2019 to June 30, 2019. In accordance with Section 98A(3)(b) of Act 771, the commission imposed a financial penalty amounting to RM856,875 on MA Sepang,” it said.