aviation sector


AirAsia India names Tata Steel executive Bhaskaran as new CEO

NEW DELHI, Oct 10 — India’s Tata Steel Vice-President of Corporate Services Sunil Bhaskaran will be AirAsia India new Chief Executive Officer and Managing Director, replacing Amar Abrol who stepped down in May. Bhaskaran will assume his new role…

Mavcom sees 38.1% increase in total number of complaints in the first half of 2018

KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) saw a 38.1% increase in number of complaints from consumers in the first six half of the year, compared to the same period last year, indicating an increased level of awareness among travelers.

The fourth issue of the aviation commission’s Consumer Report said out of the 858 consumer complaints received, it successfully resolved and closed 99.4% of total complaints throughout the six-month period.

Of that 53.0% of the resolved complaints resulted in the airlines reversing its initial decision for a resolution in favour of the consumers.

Mavcom continued to showcase its high success rate in terms of resolving complaints amidst the increase in the number of complaints lodged.

For every one million passengers carried, Mavcom received an average of 20 complaints in the period under review.

Compared to the same period in the previous year, there has been an increase recorded for almost all categories of complaints.

Mishandled baggage, processing of refunds and flight delays taking the top three categories of complaints, collectively accounting for 57.4% of total complaints encountered.

Malaysia Airlines accounted for 49.8% of the total complaints, with 427 complaints from 317 last year.

Meanwhile, AirAsia recorded 22.4% or 192 of the complaints received, while Malindo Air's share of complaints grew to 119 from 106 or 12.3%.

“While we are tasked with the economic regulation of the aviation sector, our mandate includes protecting the interests of consumers as well. We are glad to note a marked improvement in the level of consumer awareness as evidenced by the increase in the number of complaints received by the Commission. The Commission will continue to ensure that consumer complaints are addressed, resolved and closed expeditiously,” said Mavcom Executive Chairman Dr Nungsari Ahmad Radhi.

“The Consumer Report is a regular publication of the Commission that also provides consumer feedback to the service providers in the industry as a means for them to improve levels of service quality,” he added.

The report provided a detailed look at the types as well as the frequency of complaints by consumers pertaining to both airlines and airports operating in the sector.

The report also detailed the Commission’s latest consumer-centric initiative, FlySmart, in line with MAVCOM’s efforts to heighten the level of awareness among consumers of their rights throughout Malaysia. Information on the Commission’s Quality of Service (QoS) Framework aimed at improving service levels at airports in Malaysia, was also detailed in the report.

Cruising through changes in aviation

2018 is marked with changes across various sectors as the new government shifts into place and enforces new regulations and policies that are in line with its manifesto. Malaysia’s aviation space has also sees some changes within the last few months as aviation players question the need for standardising the passenger services charge (PSC) rate, […]

Vietnam property tycoon bets big on new airline

HANOI, Aug 1 — Pressed by poverty into work when he was 14, Trinh Van Quyet now presides over a Vietnamese property empire and is betting billions on a new airline in Southeast Asia’s crowded aviation sector. The 43-year-old tycoon clawed his…

AirAsia’s fundamentals intact, investors to be assured

KUCHING: AirAsia Group Bhd’s (AirAsia) business model remains intact in spite of negative news flow and rising jet fuel prices and analysts advocate investors to look past these short-term pressures. In an aviation sector update, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) found AirAsia’s share price compelling at this juncture after it […]

Citaglobal Airports’ proposal for new LCCT was supported by AirAsia

PETALING JAYA: A proposal for a new low-cost carrier terminal (LCCT) to be developed at Kuala Lumpur International Airport (KLIA) was made last year by a company called Citaglobal Airports Sdn Bhd, a move which looks to have had the backing of the AirAsia group, the largest user of klia2, the current LCCT.

Documents sighted by SunBiz revealed that the company's director, Datuk Seri Mohamad Norza Zakaria, had proposed to then prime minister Datuk Seri Najib Abdul Razak, via a letter dated Nov 24, 2017, the building of a new LCCT that will be able to accommodate higher passenger numbers, especially with the establishment of the Digital Free Trade Zone.

Citaglobal Airports said it will be able to generate the required funds for the project from the private sector which will benefit the government in terms of savings on infrastructure and operation costs.

In addition to that, it said UK-based airport operator Manchester Airports Group Plc indicated interest to manage and operate the new LCCT.

The project was said to require 450 acres, for which Citaglobal Airports suggested the government transfer land rights from the Director General of Land and Mines to the Transport Ministry, which will then be leased out for the project for a period of 99 years.

“The necessity for a new LCCT in KLIA will make Malaysia a leading hub in Asia with a 'dual hub', whereby the main KLIA terminal will house the OneWorld Alliance, klia2 will house other premium airlines and the new LCCT will accommodate the low-cost carriers,” the proposal read.

Companies Commission of Malaysia records show that Citaglobal Airports was incorporated on Nov 2, 2017 and is involved in wholesale of goods without particular specialisation and management and business consultancy activities.

AirAsia Bhd issued a letter of support for the plan via a letter dated Nov 2, 2017 which coincides with Citaglobal Airport's incorporation date. The letter carried AirAsia's letterhead and bore the signature of its executive chairman Datuk Kamarudin Meranun and copies were sent to AirAsia group CEO Tan Sri Tony Fernandes and AirAsia Bhd CEO Aireen Omar.

The low-cost airline expressed its interest in shifting its operations to the new LCCT.

“We understand that Citaglobal Airports Sdn Bhd plans to develop a LCCT at KLIA. We are in full support of this proposal as the aviation sector is a major contributor to the country's economic growth and accords significant contributions to other sectors of the economy,” it said, citing a study by Bain & Co.

Kamarudin said it would support Citaglobal by making the new LCCT the base for AirAsia Bhd and AirAsia X Bhd operations, have all flights operated by AirAsia group operate at the new LCCT and participate with Citaglobal to generate non-aeronautical revenue.

Citing the recent increase in Passenger Service Charge (PSC) introduced by the Malaysian Aviation Commission (Mavcom) and the proposed equalisation of PSC at both airports, on top of other cost increases proposed by the commission and the Department of Civil Aviation, the airline said an LCCT with a much reduced PSC and cost for travellers is required to accommodate the low-fare travel segment while KLIA and klia2 could be used to accommodate premium airlines.

AirAsia declined to comment in response to SunBiz's queries on the matter.

According to Malaysia Airports Holdings Bhd, AirAsia accounts for 95% of traffic at klia2 and they are the largest occupant.

“Any new airport terminal construction will be under the purview of the Ministry of Transport and will need to get the government's approval. We are currently guided by the existing National Airport Master Plan,” its spokesperson said, who added that it has not received anything official on the matter.

The Transport Ministry was yet to respond to request for comments as at press time.

AirAsia strongly refutes India CBI allegations

PETALING JAYA: AirAsia Group Bhd (AAGB) lambasted the Indian Central Bureau of Investigation’s (CBI) first information report (FIR) lodged against the low-cost airline, based on information from an unnamed “reliable source.”

“We question the motives of the unnamed person, persons or organisation that lodged this FIR but we will cooperate fully with the Indian authorities in accordance with due process provided in law,” it said in a filing with the stock exchange.

AAGB refuted strongly all the allegations made in the FIR as baseless, unsupported and unjustified and will vigorously challenge these allegations.

The FIR claimed that unknown public servants have engaged in a criminal conspiracy involving AAGB, AirAsia India, group CEO Tan Sri Tony Fernandes, deputy CEO Bo Lingam, four other named parties and unknown public servants and unknown private persons, to expedite the approval process and change in aviation policies to suit AirAsia India, by lobbying with stakeholders in the Indian government through non-transparent means.

AAGB explained that its move, together with other aviation players, to lobby the Indian government to remove the 5/20 rule was done in compliance with the law and without any unlawful payments. The 5/20 rule inhibits competition and the development of a healthy aviation sector that endures for the benefit of the Indian consumer.

“Further, AAGB has had an internal review and concluded that there has been no wrongdoing by either Fernandes or Lingam.”

AAGB said the joint venture with Tata Sons Ltd to set up its low cost carrier in India carrying the AirAsia brand, was primarily due to the sterling reputation and integrity of Tata Sons in India.

“All required approvals were obtained through normal channels and it took more than a year to get these approvals. Given Tata’s more than 100 years track record and that of AirAsia’s reputation, we refute any inference of impropriety in obtaining these approvals.”

AirAsia Investments Ltd holds 49% equity in AirAsia India, while the remaining 51% is owned by Tata Sons (49%) and two individuals on the board (2%) who are Indian nationals.

AAGB reiterated that all the allegations in the FIR are unfounded and are without any rational basis and are wholly inconceivable in the context of corporate governance norms in Malaysia.

“Accordingly AAGB denies all allegations of wrongdoing and will pursue all legal remedies available to address these allegations.”

Meanwhile, AAGB said AirAsia India lodged an FIR against former CEO Mittu Chandilya last year over the contract with HNR Trading Pte Ltd which was unauthorised by the company.

It also submitted a forensic audit report by an accounting firm in India to show that funds were illegally siphoned out of the company through that unauthorised contract.

“We believe that the Bangalore police are still investigating although much time has lapsed.”

Airlines may lose pricing power if oversupply occurs

KUCHING: Airlines will quickly lose their pricing power should supply growth continue to exceed demand growth in the coming months, analysts observed in an aviation sector report. Maybank Investment Bank Bhd (Maybank IB Research) highlighted that in April 2018, supply growth of 6.3 per cent year on year (y-o-y) has exceeded the demand growth of […]

‘Mavcom needed to protect consumers’ rights’

PETALING JAYA: Amid a slew of government agency closures to slash costs and excesses linked to the previous government, a former member of the steering committee to set up an aviation commission, Tan Sri Abdul Gani Patail, and a 40-year industry veteran, Datuk Rashid Khan, are throwing their weight behind the Malaysian Aviation Commission (Mavcom).

“I cannot emphasise enough the need for Mavcom. Consumers today are faced with a multitude of situations where their rights are violated. We need an independent entity to look out for us, ” he said in a statement issued on Saturday, after the commission came under fire from Malaysian Public Transport Users Association (4PAM) president Ajit Johl, who questioned the role of Mavcom and the RM1 levy it imposes on travellers.

Calling the travelling public as the largest beneficiary of the independent commission, Abdul Gani said one of the main reasons Mavcom came into being was because of an urgent need to ensure that consumer protection and the rights of passengers were made priority and not fall through the cracks.

Abdul Gani, who is a former attorney-general, opined that the RM1 levy imposed on passengers by Mavcom when departing from a Malaysian airport is a sound investment for peace of mind. Passengers using the Rural Air Services in Sabah and Sarawak are exempted from this charge.

He explained that Mavcom offers a service which neither the Ministry of Transport nor the Malaysia Competition Commission offers, according travellers an avenue to address complaints in a timely manner.

“There is no longer a need to rely on the mercy of commercial entities or being unsure of exactly when conflicts can be resolved,” he added.

Complaints have to be responded to within a set time frame of seven days and resolved within 30 days.

Rashid, who spent the bulk of his career with Malaysia Airline System Bhd, slammed 4PAM's comments against Mavcom, calling them unwarranted accusations, which showed lack of research.

“4PAM claimed that Mavcom has something to hide regarding their accounts. I googled and found Mavcom's financial statement for FY2016 in their website. Clearly, it is out there for public consumption and a simple check of Mavcom's website is all that is needed. This shows sheer negligence by this 'users association' in terms of verification of information,” he said.

“Without Mavcom, we had the likes of Rayani Air and Suasa Airlines getting licences. Clearly, Mavcom is needed in order to ensure a well-regulated aviation sector that is free from political interference. As we kick off a new Malaysia, I hope the Pakatan Harapan government will see the value of an independent regulator for this industry,” Rashid added.

Airbus, Boeing fly into lucrative services market

SINGAPORE: Airbus and Boeing may have built their global success on the back of the transcontinental airliners but they are now eyeing a lucrative if rather less glamorous side of the aviation sector in their battle to dominate the skies – parts and repairs. While booming demand for air travel across has seen the world’s […]