AirAsia presses Mavcom to settle dispute with Malaysia Airports

An AirAsia plane parked at klia2

AirAsia and its longhaul sister carrier AirAsia X on May 14 filed a judicial review application challenging the Malaysian Aviation Commission (Mavcom) for declining to decide on its disputes with Malaysia Airports.

AirAsia’s long-running disputes with Malaysia Airports are over the passenger service charge (PSC), which comes under the purview of Mavcom, and the level of service at klia2.

An AirAsia plane parked at klia2

In the past, the airport operator had filed several court actions, including defamation against AirAsia group’s top executives. It has also demanded that the airlines, which have refused to collect the increased passenger service charges from passengers, paid the uncollected amounts.

AirAsia and AirAsia X both dispute Malaysia Airports’ claims and have applied to strike out the actions. Both airlines have also made a claim of RM480 million (US$115 million) against Malaysia Airports for damages incurred as a result of the service at klia2.

The airlines maintain that the increased PSC is arbitrary, burdens the travelling public and is unjustified as the levels of service at klia2 are inferior to that of KLIA where passengers pay the same charges (RM73 per passenger).

The LCCs have tried to engage both Malaysia Airports and Mavcom to resolve the issues through the statutory dispute structure provided by the Mavcom Act.

However, Mavcom has through two letters dated February 28 and March 18, 2019 refused to decide on the disputes on the basis that “the interpretation and applicability of sections 74 and 75 of the Malaysian Aviation Commission Act 2015 [Act 711] are currently pending disposal by the Court”.

AirAsia argued in its statement that under the Mavcom Act, “Mavcom has a statutory duty to commence to decide on the dispute once mediation between parties has failed, or is deemed to have failed. The refusal to decide on the disputes is therefore contrary to sections 74 to 78 of the Mavcom Act.”

In this regard, AirAsia and AirAsia X are also asking for a mandamus to compel Mavcom to adjudicate on the disputes between both airlines and Malaysia Airports (Sepang) in accordance with its statutory duty under the Mavcom Act.

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