KUALA LUMPUR: Malaysian Aviation Commission (Mavcom) maintained that there were no signs of financial distress at MYAirline Sdn Bhd prior to the airline's suspension of flights on Oct 12, 2023.
"Based on the data that we have (of MYAirline), there were no signs of financial and operational distress that could have led to a sudden suspension of operations."
"The airlines are required to submit their financial and operational reports to us every quarter. In fact, we impose monthly (financial and operational reports) submission to certain companies. It depends on a case-by-case basis," Mavcom executive chairman, Datuk Seri Saripuddin Kasim said in an interview with Business Times.
According to Mavcom, a total of over 117,000 estimated passengers were affected by MYAirline's abrupt suspension of operations with a total value of more than RM22 million in forward sales for scheduled flights from Oct 12, 2023 until March 31, 2024.
Saripuddin said Mavcom as an aviation regulator that specialises in the economics and commercial division of the airline industry would examine closely a company's business and financial plan before granting it an air service license (ASL).
"We also make sure that only those that have the necessary competency and capabilities are allowed to operate. We have a set of requirements for airline companies to comply with in order for them to apply for their ASL," he said said.
One of the requirements for the ASL include a minimum of three to six months of working capital to ensure that the company has the financial capability to operate the airline business.
Saripuddin said Mavcom's current framework in terms of granting ASLs to airlines are comprehensive but the aviation regulator has set up a Task Force to look into ways of possibly enhancing the application process for the ASL and other aviation-related licenses.
The Task Force, which was set up under the directive of Transport Minister Anthony Loke in October, would also look into the refund to MYAirline passengers who were affected by the carrier's suspension of operations.
Speaking on Malaysia's commercial airline industry, Saripuddin said Mavcom remains supportive towards promoting healthy competition between local airlines while standing firm to protect the rights of air travel consumers.
He said the competition between the airlines is encouraged to provide options for travellers, aligned with Mavcom's role as per the Mavcom Act 2015 [Act 771].
"We are entrusted with two core missions – to protect the consumers and to promote healthy competition in the industry. We have to ensure that all the players (airlines) are not abusing their monopoly or dominant position in the market."
On the merger between Mavcom and the Civil Aviation Authority of Malaysia (CAAM), Saripuddin said it is a policy call by the government which the aviation regulator adheres to. He said based on the discussions held with the Transport Ministry, Mavcom's role and responsibilities will be transferred from the current Mavcom Act 2015 to CAAM Act 2017.
"The announcement (of the merger) was made in December 2019. It's the government's decision but for me the most important thing is that the role of Mavcom will continue to exist despite the merger," he added.
According to news reports on October 23, Loke had said that Malaysia will have only one aviation regulator as Mavcom is slated to be merged with CAAM by 2024.
The Minister said the bill to repeal the Mavcom Act 2015 and amend the CAAM Act 2017 will be brought to Parliament in the first session of sitting next year. Currently, Malaysia is one of the few countries that have two aviation regulators – Mavcom and CAAM.
