PETALING JAYA: The Malaysian Aviation Commission (Mavcom) has decided to suspend the Air Service License (ASL) of MYAirline Sdn Bhd, effective immediately.
Mavcom executive chairman Datuk Seri Saripuddin Kasim said the decision came following MYAirline’s written representation on Oct 27, following a show cause letter issued to the beleaguered airlines by Mavcom on Oct 13.
“After reviewing the written representation, Mavcom decided to suspend MYAirline’s ASL as the representations made by the airlines are not satisfactory to the show cause letter,” said Saripuddin in a statement on Wednesday (Nov 1).
Saripuddin said that Mavcom, as the economic and commercial regulator of the Malaysian civil aviation industry, the commission decided to suspend MYAirlines to safeguard the interests of passengers and employees affected by the airline’s suspension of operations.
According to Saripuddin, before it decided to suspend MYAirline’s ASL, Mavcom assessed MYAirline’s ASL application before granting a Conditional Approval (CA) for an ASL and full ASL to the airline.
“As part of the Commission’s due process, a CA for an ASL is required by any airline to apply for an Air Operator Certificate (AOC) from the Civil Aviation Authority of Malaysia (CAAM).
“Mavcom issued a CA for an ASL to the MYAirline on December 22, 2021, effective from January 1, 2022, to December 31, 2022,” said Saripuddin.
Saripuddin said that Mavcom granted a full ASL to MYAirline after the airline had fulfilled all ASL requirements and conditions by the commission, including its “fit and proper” criteria.
“During this assessment period, MYAirline demonstrated that it has financial competence, and all its statutory declarations were found to be in order,” said Saripuddin.
Saripuddin said despite the revocation of the ASL, MYAirline is still liable to refund affected passengers according to the Malaysian Aviation Consumer Protection Code 2016 (MACPC).
“A total of over 117,000 estimated passengers are affected by MYAirline’s suspension of operations, with a total value of over RM22mil in forward sales for scheduled flights from 12 October 12 this year until March 31 next year.
“Majority of the forward sales are from travel agencies by 58 per cent (RM12.8mil), followed by 41.8 per cent (RM9.2mil) from payments made by credit or debit cards,” said Saripuddin.
“Mavcom will continue to engage with Bank Negara Malaysia in finding possible avenues of recourse for affected passengers to obtain refunds for unfulfilled flight bookings,” added Saripuddin.
Saripuddin also said Mavcom’s task force has been mandated to look into the passengers’ refunds and provide recommendations for the way forward for affected customers.
“This may include refining or expanding the mechanism for aviation consumer protection.
“In the meantime, Mavcom will continue to engage with Bank Negara Malaysia in finding possible avenues for affected passengers to get their money back,” said Saripuddin.
He said the task force will also review ways to enhance Mavcom’s existing licensing approval framework.
“This decision is in line with Mavcom’s functions, which include, among others, providing a mechanism for aviation passengers’ protection and promoting timely investments in the civil aviation industry to meet Malaysia's evolving demand and development needs.
“Hence, Mavcom’s role requires a balancing act for commercial activity to promote the sustainability and progress of the industry while ensuring passengers are protected,” added Saripuddin.
On Oct 12, MYAirline announced an abrupt suspension of its operations, citing financial pressures less than 11 months after it began operation.
The cancellation of the airline’s 40 flights stranded thousands of passengers on that day.
According to MyAirline interim accountable executive Datuk Seri Azharuddin Rahman on Oct 17, the financial issue arose after its investors pulled the rug from under the company at the eleventh hour.
Azharuddin said the company did not have a contingency plan, leading to the halt of operations.
On Oct 31, MYAirline said it is negotiating with 15 potential investors to resolve its financial issues.