Continuing Mavcom-AirAsia Spat over Air Traffic Rights

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AirAsia wants Mavcom to leave the running of the airline business to the airlines themselves and the granting of route approvals to be handed back to the Ministry of Transport.

AirAsia’s grouses about Mavcom:

  • Does not understand airline business
  • Doing more harm than good to Malaysian aviation by trying to micro-manage it
  • Holding back Malaysia’s airline industry and blocking growth with slow approvals and high charges

AirAsia Bhd today criticised the Malaysian Aviation Commission (Mavcom) for failing to understand the nature of the airline business.

Chief Executive Officer (CEO) Riad Asmat said the aviation body not only does not understand the industry but it was also doing more harm than good to the Malaysian aviation sector by trying to micro-manage it.

“It is holding the industry back with slow approvals and high charges while other countries invest heavily in increased air traffic connectivity, to the detriment of the Malaysian tourism sector and the economy,” he said in a statement today.

Citing that AirAsia has seen a three percent decline in tourist arrivals in Malaysia to 25.95 million in 2017, Riad said Mavcom’s rejection of route applications would only further compound the issue and hamper the country’s tourism sector and economy.

Riad also stressed that local airlines were already lagging behind other ASEAN carriers in terms of total weekly seats deployed for destinations in Asia.

“According to the Ministry of Tourism Malaysia, Thai carriers have deployed 893,166 weekly seats while Singapore carriers have deployed 661,863 compared with 590,422 by Malaysian carriers as of December 2017.

“Mavcom blocking growth in this manner will only serve to benefit other regional airlines who are allowed to grow without undue restrictions by their own civil aviation authorities,” he said.

Yesterday, Mavcom defended its decision to reject AirAsia’s application to add more flights on two routes, Kota Kinabalu-Sandakan and Kuala Lumpur-Haikou, on the basis of route overcapacity.

Mavcom said it looks to facilitate orderly growth, competition and consumer choice over the long term, and the prevention of consumer inconvenience, in the allocation of air traffic rights (ATRs).

“Ill-effects of route overcapacity include heightened risks of unutilised seats, which in turn could lead to flight cancellations and merging of flights, which are detrimental to passenger convenience,” Mavcom said.

Emphasising that Mavcom was not an airline, the AirAsia CEO said it should leave the running of the airline business to actual airlines like AirAsia who understand the market.

“We operate more than 320 routes, one-third of which are unique, to over 130 destinations across Asia Pacific, the Middle East and the United States.

“We have a dedicated team of 20 people working on network and scheduling as well as another 60 people doing route revenue working to make flights more affordable for the rakyat,” Riad said.

On the Kota Kinabalu-Sandakan route, AirAsia said inter-Sabah air connectivity has been held back for years and they are keen to boost tourism in the state.

In addition, they also questioned why MASwings, a regional airline operating the rural air services in East Malaysia, is being allowed to operate 21 trips per week.

“MASwings is a fully subsidised airline and possesses an undue financial advantage over other commercial airlines, and a review of its 21 times weekly service is required,” AirAsia added.

The low-cost airline had previously requested an increase of its Kota Kinabalu-Sandakan services – currently at a 90% load factor – to 32 trips per week from 25.

As for the Kuala Lumpur-Haikou route, AirAsia said it is irrelevant for Mavcom to state that the carrier had previously operated and terminated the route in 2012 because market conditions have changed since then.

“Chinese nationals now enjoy an electronic visa facility for travel into Malaysia and Malaysia is one of the 59 countries that enjoy visa-free access to Hainan Island, where Haikou is located,” AirAsia said.

“These factors mean additional capacity is needed on the route to cope with the projected increase in traffic between Kuala Lumpur and Haikou,” it added.

AirAsia reiterated that the responsibility for granting route approvals should be handed back to the Ministry of Transport (MoT).

“MoT understands the importance and values the benefits of a fully liberalised aviation industry, and has consistently granted the necessary route approvals as long as bilateral rights are available,” it said.