KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) has refuted allegations by Suasa Airlines Sdn Bhd and Eaglexpress Air Charter Sdn Bhd that it has not played its role in encouraging the aviation industry to grow but has instead suppressed it.
In a statement, the commission said it had rejected Suasa Airlines’ application on July 22, 2016 to operate a non-scheduled commercial flight from Kuala Lumpur to Langkawi as it did not possess an Air Service Permit (ASP).
However, it said on the same day, Suasa Airlines continued to operate this flight on the pretext of a “demonstration flight”.
The return “demonstration flight” from Kuala Lumpur to Langkawi carried a total of 140 passengers each way and is not considered as a “demonstration flight” as per International Civil Aviation Organisation’s (ICAO) classification.
The commission said it then proceeded to conduct a thorough investigation on the matter which was then brought up to the Attorney General’s Chambers (AGC) for consent to prosecute to be obtained.
“Mavcom would like to stress the importance of complying with the laws and regulations, which is a fundamental requirement for participation in the industry.
“It is necessary for airlines to have all regulatory approvals in place before operating, as required not only by Malaysian laws but also in compliance with international legal requirements and practices.
“Stringent steps taken by the commission is ultimately to ensure a resilient aviation industry as well as to safeguard consumers, and therefore the commission is firm in its standing and will take actions on offenders that do not comply with the industry laws and regulations,” it said.
Mavcom said on August 30, 2016, the commission had granted Eaglexpress an ASP for 12 months (from September 1, 2016 to August 31, 2017) with specific conditions to be complied with by the airline within stipulated timeframes.
Eaglexpress failed to comply with the conditions within the deadlines.
Mavcom revoked the ASP as Eaglexpress was unable to meet the a few requirements, including to convert its current negative shareholders’ equity to a positive position and increase its cash level to RM30 million being equivalent to two months of projected operating cost for 2016, as provided by the airline itself by November 30, 2016.
It said Eaglexpress had also applied for a judicial review of Mavcom’s decision to revoke its ASP at the Kuala Lumpur High Court.
On August 14, 2017, Eaglexpress' application was dismissed by the High Court with costs of RM10,000 to be paid by Eaglexpress to Mavcom.
“This case of Eaglexpress, as well as the earlier case with Suasa Airlines are clear indications to potential and current industry players that operating an airline (chartered or scheduled) is extremely challenging and requires a high degree of planning, financial depth, operational know-how and execution competency.
“A robust commercial foundation and depth are therefore necessary prerequisites to be a player in this industry – regardless of whether it is an ASP or ASL holder.
“The commission’s responsibility is to ensure enterprises participating in the industry are properly equipped and ready, in order to safeguard consumers’ safety and interest.
“As an independent economic regulatory body established pursuant to Act 771, Mavcom’s mission is to promote and ensure a commercially viable, consumer-oriented and resilient civil aviation industry that supports Malaysia’s growth,” it said.