AirAsia and Malaysia Airports fined by MAVCOM

The Malaysian Aviation Commission (MAVCOM) has fined AirAsia and AirAsia X RM200,000 each for charging credit card, debit card and online banking processing fees separate from their base fares. This, it said, was in contravention of the Malaysian Aviation Consumer Protection Code 2016 (MACPC).

According to the commission, it has been monitoring for compliance with the new provisions of the MACPC since 1 June 2019. Both AirAsia and AirAsia X have been found to infringe subparagraph 3(2) of the MACPC which requires full disclosure of the final price of the airfare. As part of the due process to determine whether a contravention has been committed, MAVCOM issued show cause letters to both airlines, and afforded opportunities to the airlines to provide factors to mitigate the quantum of the penalties. After  a thorough evaluation and taking into consideration the written representations by the airlines, the commission has imposed a fine each on AirAsia and AirAsia X for the first violation of the subparagraph for the period commencing 1 June 2019 to 9 August 2019.

According to the compliance laws of the Malaysian Aviation Commission Act 2015 [Act 771] and paragraph 22 of the MACPC, this empowers the commission to impose a financial penalty for a non-compliance of the MACPC, an amount not exceeding RM200,000. In the case of a second or subsequent non-compliance, the commission can impose an amount ten times of the financial penalty which was imposed for the first non-compliance.

The MACPC came into effect on 1 July 2016, and was published in line with MAVCOM’s aim to protect the rights and interests of consumers. It aims to offer more transparency on aviation service providers’ obligations towards consumers and clearer guidance for consumers on their rights and interests as air travellers. The MACPC was enhanced with amendments that took effect on 1 June 2019 to further protect consumers’ interests.

Last year, AirAsia and AirAsia X were also fined RM160,000 each for advertising misleading air ticket prices, which was in violation of subparagraph 3(1) of the Malaysian Aviation Consumer Protection Code 2016 (MACPC) in the second quarter of 2018.

Meanwhile, the commission also fined Malaysia Airports (Sepang), a subsidiary of Malaysia Airports Holdings (MAHB), RM1,179,889 for not meeting selected quality of service targets set by MAVCOM in the first quarter of 2019. MAVCOM concluded that MA Sepang failed to meet several requirements of Airports Quality of Service Framework (Airports QoS Framework) during the period of January to March 2019, after it was implemented in both KLIA and klia2 on 1 September 2018. The financial penalty comes after MAVCOM has taken into consideration MA Sepang's written representation and factors submitted by the airport for the purposes of mitigating the quantum of the fine.

KLIA was hit by a major systems disruption last month causing flights and check-ins to be delayed. MAVCOM issued a statement previously saying that it was "disconcerted by the major inconvenience" caused by the systems disruption. It added that it has been striving to strengthen the aviation industry in Malaysia.

"Part of the commission’s role is to provide a mechanism for aviation consumer protection, and we are extremely dissatisfied at what has happened at KLIA," it said previously. MAVCOM also urged MAHB to inform passengers and airlines on when operations will return to normal while addressing the ongoing crisis. MAHB recently reported a revenue of RM2,513.5 million for the first half of the year ended 20 June 2019. Its revenue had increased by 6.0% to RM2,513.5 million on the back of higher passenger growth.

Nungsari Ahmad Radhi, executive chairman of MAVCOM, said: “Air traffic in Malaysia today numbers at more than 100 million passengers per annum. Given this large consumer base, the commission has set in place the MACPC and Airports QoS Framework, which are regulations that are designed to protect the rights and interests of the aviation consumers, as well as a means to increase the level of services in the industry.”

He added that these actions are also intended to move the aviation industry in Malaysia towards an improved level of service, integrity and transparency, in line with MAVCOM’s long term objectives for the industry.

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