Mavcom works to benefit all in the aviation sector, not just one, says chairman

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KUALA LUMPUR (Sept 12): Malaysian Aviation Commission (Mavcom) executive chairman Dr Nungsari Radhi has come out strongly in defence of the aviation regulator's role, saying it is to ensure its work benefits the industry overall and not any one specific player. 

"There are many stakeholders in the aviation industry in Malaysia, not merely one. We have consciously worked towards that objective and will continue to do so," he said in a statement today. 

In his LinkedIn post on Monday (Sept 9), AirAsia Group Bhd co-founder and group chief executive officer Tan Sri Tony Fernandes had described the independent aviation regulator as "a dysfunctional entity" for failing to discharge its duties effectively and fairly. 

Among the seven reasons he cited for the commission's failure included the time-consuming and bureaucratic policies introduced since Mavcom was established in March 2016, dictating airlines’ commercial decisions, adding unnecessary cost burden to travellers, its failure to introduce service level agreements (SLA) between airport operators and airlines, and its lack of understanding and appreciation of the low-cost model. 

In espousing the claims by Fernandes, Nungsari said since 2016, the commission has undertaken many initiatives that benefit consumers and industry players. 

One of which is the Malaysian Aviation Consumer Protection Code 2016 (MACPC), which he said had ensured consumers only pay for those services which they opt for, adding that it had also eliminated hidden charges such as the klia2 fee by AirAsia. 

"Meanwhile, payment processing fees cannot be charged separately from the base fare. We believe these measures, resulting in greater transparency, would allow consumers to enjoy monetary savings and make more informed decisions. 

"We also believe aviation consumer complaints are now being taken more seriously, and refunds will be reimbursed to passengers within 30 days from the date of request," he said. 

He also noted that between January 2018 and August this year, the commission had issued over 93% of air traffic rights (ATR) applied by the airlines, of which AirAsia was a major beneficiary with over half of the total ATRs awarded being allocated to them. 

"We further note that 24% of these ATRs that were granted to AirAsia had subsequently been returned to us, as they were unutilised," he added.

Additionally, the commission has introduced a robust licensing application process that ensures only serious, capable and prepared applicants are considered, as well as the Airports Quality of Service (QoS) framework to elevate service standards at airports. 

"We have also been working with the industry and capital markets in implementing the internationally-recognised regulated asset base (RAB) framework in Malaysia," Nungsari said. 

Nungsari pointed out that the Mavcom team, who are former employees of airlines including AirAsia, airports, other regulatory bodies, private sector and civil service, are ably-qualified professionals comprising, among others, aviation professionals, financial analysts, economists and lawyers. 

"Despite external pressures, we believe they have delivered much good to the consumers and industry. 

"The commission and its employees are duty bound to act within the confines of the Malaysian Aviation Commission Act 2015 [Act 771] and we intend to ensure industry players similarly respect the laws and regulations of the country — our recent financial penalties are pursuant to this goal," he said, referring to the RM200,000 fine each slapped against AirAsia and its associate AirAsia X Bhd for charging its customers a processing fee, when they purchased air tickets via credit cards or online banking, as well as a RM1.18 million fine against Malaysia Airports Holdings Bhd’s unit Malaysia Airports (Sepang) Sdn Bhd for not complying with the Airports QoS framework. 

"We are aware that we can be subject to judicial review. As an example, AirAsia had sought leave to commence judicial review proceedings against the commission. In that particular case, the Kuala Lumpur High Court had on June 25 rejected the said leave application," he added.