12 September 2019
The Malaysian Aviation Commission (Mavcom) reiterated that it serves all industry stakeholders in the country instead of just “one”.
Its executive chairman Dr Nungsari Ahmad Radhi said this after AirAsia Bhd group chief executive officer Tan Sri Tony Fernandes claimed Mavcom had failed the nation’s aviation sector, providing his list of reasons.
“There are many stakeholders in the aviation industry in Malaysia, not merely one, and the Commission’s role is to ensure its work benefits the overall industry and not any specific player.
“We have consciously worked towards that objective and will continue to do so,” he said while responding to an article that Fernandes posted on LinkedIn.
Dr Nungsari also said his team was very qualified and that they had delivered well to consumers and the overall industry despite external pressures.
He also said that some of Mavcom’s team members were former employees of airlines (including AirAsia), airports, other regulatory bodies, private sectors and the civil service.
“More information on the Commission and our work is available on the Mavcom website, along with statements and publications we have issued to date. The answers to some of the matters raised in the LinkedIn article are available there for those who care to look,” he said while addressing the worded post, titled, “Mavcom – A dysfunctional entity.”
Dr Nungsari earlier said the commission and its employees were also duty bound to act within the confines of the Malaysian Aviation Commission Act 2015.
He also said it intended to ensure industry players similarly respect the laws and regulations of the country, and that its recent financial penalties were pursuant to this goal.
“We are aware that we can be subjected 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, 2019 rejected the said leave application.”
Fernandes claimed that some of the requirements imposed by Mavcom were unnecessary and time consuming.
He also claimed that Mavcom, on many occasions, rejected several route applications even though bilateral traffic rights were available with other countries.
Fernandes also said the commission failed to discharge their duties effectively and fairly.
He drew on the RM1 ‘Regulatory Service Charge’ imposed on all passengers flying out of airports in Malaysia, in addition to the Passenger Service Charges (PSC) and Departure Levy.
Fernandes claimed this was an unnecessary burden for passengers who are collectively paying close to RM30 million a year to cover the operating costs of the regulator which he believed did not represent their best interest.
He also said that the commission had yet to introduce Service Level Agreements (SLAs) between airport operators and airlines.
Fernandes claimed that without SLAs, airports in Malaysia were using their monopolistic position to earn excessive profits, while abusing their power in the form of ever-increasing charges.
He also said there was no recourse for airlines to address the numerous operational issues such as those at klia2.
Fernandes cited frequent unplanned runway closures, uneven aprons and taxiways, and a poor airport design that required long walks to gates and subsequent delays for passengers trying to get to their flights.
He also claimed that Mavcom lacked understanding and appreciation of the low-cost model.
“In October 2019, Mavcom will announce the new PSC rates (effective January 2020) which were developed in accordance with the Regulated Asset Base (RAB) Framework. In 2017, Mavcom removed the distinction of klia2 which has a lower PSC when they amended the aviation services charges.”
“And now there seems to be an inclination to group KLIA and klia2 together, which would re-equalise international PSC rates for both airports. While the tariff options and rates have yet to be finalised, the new framework could negate the Cabinet’s recent
decision to reduce the international PSC rates (beyond Asean) for all airports in Malaysia, except KLIA,” he said.
Fernandes said the low-cost carrier (LCC) segment has grown by an average of 16 per cent, close to triple the growth of full-service carriers and now accounted for 50 per cent share of air travel in Asean.
He said however, among Mavcom’s senior management there was a resistance to the shift in customer preference for air travel, creating a conflict of interest when it came to the understanding of low-cost versus full-service carriers.
Fernandes also felt that Mavcom’s functions are duplicative and could simply be assumed by other existing authorities.
“For regulatory-related matters such as route approvals, the Ministry of Transport and the Civil Aviation Authority of Malaysia (CAAM) are well placed to assume existing responsibility from Mavcom. (Likewise), the Ministry of Domestic Trade and Consumer Affairs can undertake consumer protection-related matters,” he added.