Over-regulation and lack of clarity could hinder aviation growth: AA CEO

Sepang, July 3, 2018:  Asia’s largest low-cost airline, AirAsia Bhd, is calling for aviation regulators in Malaysia to improve collaboration to support the air transportation industry’s growth trajectory.

AirAsia chief executive officer Riad Asmat said there needs to be open discussions and more clarity between airlines and regulators, such as the Malaysian Aviation Commission (Mavcom).

“I agree that we need to be regulated and clarity gives us good indication on where we can move and what we can and cannot do. The bit I don’t get is, for example, when I ask for flights and I get rejections, I don’t get the clarity on why it was rejected.

“Usually the rejection (on a route approval) comes with very minimal reason or none at all to a certain degree. We need to have a better understanding on what is the cause,” he said in an interview with NST Business last week.

Riad said like other airlines, if the reasons behind the route rejection were clear, then AirAsia would probably agree to it or re-look at its route network plan.

One of the routes rejected by Mavcom recently is the Kota Kinabalu–Sandakan route. AirAsia had earlier planned to add an additional seven weekly flights on the route.

The main aviation regulators in Malaysia are the Ministry of Transport (MoT), Mavcom, and the Civil Aviation Authority of Malaysia (CAAM).

“I engage everyone. It’s cordial to a certain degree but I always like clarity and I feel that I can get clarity with certain parties but not as much with other parties,” Riad said, adding that both sides should work to improve ties.

In advanced countries, regulation of the aviation industry is more centralised. In the UK for example, the Civil Aviation Authority (CAA) manages all aviation related matters in the country.

In the US, the Federal Aviation Administration (FAA) oversees safety and strategic aviation matters under the US Department of Transport (DoT). Another sub-division under the DoT is responsible for consumer protection according to nst.com.my.

Malaysia’s Mavcom, established on March 1, 2016 under the Malaysian Aviation Commission Act 2015, is responsible for administering and managing air traffic rights, regulating the civil aviation industry as well as providing a mechanism for dispute resolution between aviation industry players.

The body is also responsible for protecting consumers’ rights as well as advising the Government on managing routes under public service obligations.

The MoT, meanwhile, is in charge of industry policy-making and government-to-government discussions while CAAM regulates the technical and safety matters for the industry.

Prior to the establishment of Mavcom, matters concerning air traffic rights were parked under MoT, said Riad.

“We can’t have too many (regulators). Too many cooks won’t work. This is what happens at the end of the day. The clarity is not there, there’s confusion.

“I think it will be great if I could just deal with one party and that’s it. You can have your sub-divisions or subsidiaries and all that, but one party needs to make a call on things and that will give us greater clarity. Things will be very straightforward,” he added.

Riad said he is looking forward to meet the new members of MoT to discuss pressing issues and how to further improve Malaysia’s aviation industry.

“I have not had the opportunity to meet the new MoT yet. I think the time will come. I wouldn’t shy away from sharing my concerns with them.

“Honestly, I just want to run my business. I have responsibilities not just to the rakyat, but we’re also a business at the end of the day and we need to grow,” Riad said.

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