MAVCOM Imposes Significant Financial Penalties On AirAsia, AirAsia X And Malaysia Airports (Sepang)

Author:Mr Shannon Rajan and Eric Gabriel Gomez
Profession:SKRINE
 
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Introduction

On 20 January 2020 the Malaysian Aviation Commission (MAVCOM) announced that it had imposed RM2 million fines on AirAsia Berhad (AirAsia) and its long-haul sister airline AirAsia X Berhad (AirAsia X). MAVCOM further announced that it had imposed an RM856,875 penalty on Malaysia Airports (Sepang) Sdn Bhd (MA Sepang), which is the operator of Kuala Lumpur International Airport (KLIA).

MAVCOM is the economic regulator of Malaysia's aviation industry and is empowered to impose financial penalties of varying degrees pursuant to the MAVCOM Act 2015.

Breach of Consumer Protection Code

MAVCOM found AirAsia and AirAsia X to have contravened the Malaysian Aviation Consumer Protection Code 2016 (MACPC) from 10 August 2019 to 11 September 2019. The MACPC is a code developed by MAVCOM to ensure the protection of air travellers. Among other things, the MACPC specifies the minimum service levels and standards for airlines, which include the full disclosure of airfares and a prohibition on post-purchase ticket price increases.

The fines imposed on AirAsia and AirAsia X were for a contravention of Subparagraph 3(2) of the MACPC, which prohibits charging credit card, debit card or online banking processing fees separate from a base ticket fare.

In September 2019 both airlines were fined RM200,000 for contravening the same provision. Pursuant to Section 69(4) of the MAVCOM Act, in the event of a second case of non-compliance, MAVCOM can impose a financial penalty of 10 times the amount of the fine imposed for the first noncompliance. MAVCOM therefore opted to fine AirAsia and AirAsia X the maximum amount permissible for their latest infringement.

Failure to meet Airports Quality of Service Framework

MAVCOM determined that MA Sepang had not met the standards specified in the Airports Quality of Service Framework (QoS) between 1 April 2019 and 30 June 2019. The QoS is a directive developed by MAVCOM to improve passenger comfort at airports and facilitate a better...

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