Tribunal sets aside RM10m fine

KUALA LUMPUR: AirAsia Bhd and Malaysia Airlines have succeeded in setting aside the RM10mil fine each imposed on them by the Malaysia Competition Commission (MyCC) in 2014.

The Competition Appeal Tribunal chaired by High Court Justice Hasnah Mohamed Hashim allowed the appeal yesterday.

“Our decision is unanimous. We find that there is no infringement under Section 4(2) of the Competition Act 2010.”

Justice Hasnah instructed the RM10mil penalty be refunded to each company.

She set aside the MyCC decision that the two airlines had breached a market sharing prohibition under the Competition Act 2010, and made no order on costs.

Also on the tribunal were former Chief Judge of Malaya Tan Sri Haidar Mohamed Nor, former Bank Negara deputy governor Tan Sri Dr Lin See-Yan, former Economic Planning Unit director-general Tan Sri Dr Sulaiman Mahbob and International Islamic University assistant professor Dr Wan Liza Md Amin.

On March 31, 2014, MyCC found both airlines guilty of anti-competition practices, under the Act when they entered into an agreement which saw them sharing markets in the air transport services sector within Malaysia.

The Government-led equity tie-up between AirAsia and MAS, inked on Aug 9, 2011, fell through later and was called off by Khazanah Nasional Bhd on May 2, 2012.

However, MyCC proceeded with the anti-competition probe when the 2010 Act came into force on Jan 1, 2012, after the AirAsia-MAS deal was instituted.

MyCC’s fine was based on flights mounted by both airlines in the four months between Jan 1 and April 30, 2012, on the KL-Kota Kinabalu, KL-Kuching, KL-Sandakan and KL-Sibu routes.

The penalty – RM10mil each on AirAsia and MAS – was less than the maximum fine of 10% of the companies’ respective worldwide turnovers between January and April 2012, when the alleged infringement occurred.

Tay Beng Chai and Leonard Yeoh appeared for AirAsia, S. Logan for MAS and N. Nahendran for MyCC.

Met by reporters after the verdict, AirAsia Group legal department head Amir Faezal Zakaria said he was happy AirAsia was vindicated.

“It is good for the airline industry; the tribunal made the right decision,” he said.