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Mavcom focused on passenger/consumer protection

KUALA LUMPUR: In the face of criticisms against the Malaysian Aviation Commission (Mavcom), its executive chairman says the airline and airport industry regulator is more focused on passenger/consumer protection.

Tan Sri Abdullah Ahmad, a retired Air Force general, said that since its formation two years ago, Mavcom had received over 3,900 public complaints and managed to resolve up to 93% of them within 30 days.

“I’d like to emphasise here that other than to regulate the airlines and the airports, Mavcom is here looking after the ‘rakyat’ who are using the airlines as a mode of travel.

“We are not a money-making body; what we are concerned about is to take care of the welfare of consumers to make sure that they get what they want out of what they pay and that complaints they put forward are not ignored,” he told Bernama today.

Abdullah said that in the past, passengers were at the mercy of the airlines for whatever complaints they made and it was up to the airlines to entertain them or not.

But this was not the case anymore after Mavcom came into being, whereby the passengers would submit their complaints to the airlines with a copy to Mavcom.

“If the airlines concerned do not respond within seven days, we’ll move in. We’ll make sure the complaint by the consumer is entertained and resolved. And, it’s Mavcom’s KPI (Key Performance Index) to resolve it within 30 days,” he said.

Criticisms against Mavcom came mainly from budget airline AirAsia, with its Group chief executive officer Tan Sri Tony Fernandes saying the airline industry did not need such a regulatory body and that the Transport Ministry by itself was very capable of growing the local airline industry without Mavcom.

Fernandes said that dealing with Mavcom had been “nothing short of a torture” for AirAsia and he would never stop fighting for fair industry practices and demand decisions to be made for the benefit of all Malaysians.

The AirAsia CEO said this in response to a police report lodged by Mavcom on May 16 over his accusation that the aviation regulator told the airline to cancel all 120 additional flights it had requested to cater for increased demand during the recent general election.

Abdullah said most advanced countries also had an independent regulator like Mavcom to help solve “very messy problems in the aviation business”.

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Local transport sector faces headwinds

PETALING JAYA: AmInvestment Bank, which is neutral on the transportation sector over the next 12 months, is mindful of various headwinds in the sector such as the increased regulatory risk on the back of the change in the political landscape following the 14th general election (GE14), potential dial-back of certain major initiatives by the preceding administration and rising fuel costs.

The research house, however, noted that there are plenty of opportunities in store for players, particularly, in the tourism and e-commerce space.

It finds the projection by Tourism Malaysia, which estimated Malaysia’s tourist arrivals to surge by a whopping 28% to 33.1 million in 2018 from 25.9 million in 2017, and will hit 36 million in 2020, a tad optimistic given that the numbers had stagnated at about 26 million over the last three years.

“Nonetheless, we do agree that the trend for tourist arrivals in coming years is upwards, as Malaysia is slated to host a series of high profile international events. Low-cost carrier AirAsia and airport operator Malaysia Airports are the main beneficiaries of the growing tourist arrivals,” it said.

The rapidly expanding e-commerce sector, particularly, online shopping, has created huge opportunities for parcel delivery service providers such as Pos Malaysia. Malaysia’s presence in the regional and global e-commerce market is on the cusp of a quantum leap, driven by the Alibaba-backed Digital Free Trade Zone (DFTZ) project in the KLIA Aeropolis.

“Apart from Malaysia Airports (the landowner and developer of the KL Aeropolis), we believe local logistics players (including warehouse operators) are poised to garner a slice of action in the physical zone of the DTFZ.”

On the other hand, AmInvestment Bank said regulated businesses may face a higher regulatory risk, as the new administration strives for better deals for the rakyat, as promised in its election manifesto. Under these circumstances, it is unlikely, for instance, for airport operator Malaysia Airports to secure an upward revision in passenger service charges.

Also, there are concerns if the DFTZ project will go ahead as planned. All China-Malaysia deals signed in recent years will now come under scrutiny.

Meanwhile, it said transshipment seaport operator Westports will still feel the negative impact from the recent reorganisation of the global shipping alliance, resulting in the diversion of transshipment cargo volumes to Singapore.

“On a brighter note, we expect gateway cargo volumes to continue to grow in coming years, thanks to Malaysia’s robust exports and imports. Meanwhile, Bintulu Port will be weighed down by start-up costs at its newly completed Samalaju Industrial Port.”

AmInvestment Bank’s top pick for the transport sector is AirAsia Group Bhd.

“AirAsia is a good proxy to the growing low-cost air travel market in the region, underpinned by rising per capita incomes and a young demographic. Its strong market presence enables it to compete effectively against its rivals. It has struck a chord with investors with its plans to monetise some of its auxiliary businesses.”

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KUCHING: Malaysia’s transport sector faces various headwinds ahead, driven by increased regulatory risk on the back of the change in Malaysia’s political landscape, potential dial-back on certain initiatives, and rising fuel costs. While there are plenty of opportunities in store for players, the research wing og AmInvestment Bank Bhd (AmInvestment Bank) was mindful of various […]

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Toyota to acquire US$1 billion stake in Grab

SINGAPORE: Toyota Motor Corp has agreed to buy a US$1 billion (RM3.99 billion) stake in Southeast Asia's Grab in the biggest investment by a carmaker into a ride-hailing firm, at a time when traditional automakers are racing to team up with disruptive tech companies.

The value of six-year-old Grab will be just over US$10 billion after the investment, said a person familiar with the matter.

The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo car purchases by connecting them with drivers.

Some automakers have responded by partnering with makers of ride-hailing apps which dominate the fast-growing field of mobility services, in anti

General Motors Co has invested in US ride services firm Lyft, whose rival Uber Technologies Inc is also backed by Toyota. Meanwhile Japan's SoftBank Group Corp – also an investor in Grab and Uber – last month said it would invest US$2.25 billion in GM's autonomous vehicle unit Cruise.

Toyota's trading arm invested an undisclosed sum in Grab last year. This time, the automaker is lead investor in a financing round launched after Grab bought Uber's Southeast Asian business.

Grab called it the largest-ever investment globally by an automotive manufacturer in the ride-hailing sector.

The Singapore-headquartered firm did not disclose how much fresh capital it aims to raise. It raised US$2.5 billion in its last round in July, resulting in a reported value of US$6 billion.

Grab said it logs six million rides a day via apps downloaded onto over 100 million mobile devices. The firm also offers online to offline services, such as food delivery and digital payments, which it aims to expand deeper into the region using funds from its latest financing round.

“We will work with partners like Toyota to continue to transform transportation in Southeast Asia,” Grab said in an email. It also said Toyota will appoint an executive to Grab's board while a dedicated Toyota team member will be seconded to Grab as an executive officer.

Toyota said it aimed to offer financing, insurance and maintenance services to drivers based on data collected through recorder devices already installed in some Grab vehicles.

“Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia,” Toyota executive Shigeki Tomoyama said in a statement. – Reuters

Mavcom explains rejection of AirAsia’s application to increase flights on two routes

PETALING JAYA: AirAsia’s application to increase frequency for its Kuala Lumpur to Haikou and Kota Kinabalu to Sandakan routes were rejected due to concerns of overcapacity, said Malaysian Aviation Commission (Mavcom).

“In allocating air traffic rights (ATRs), the commission wishes to facilitate orderly growth while also considering the risk of overcapacity (where the supply of seats far exceeds passenger demand) on a particular route,” it said in response to a news report by local media.

Mavcom said that the ill effects of route overcapacity include heightened risks of unutilised seats. This could lead to flight cancellations and merging of flights, which are detrimental to passenger convenience.

“In addition, overcapacity gives rise to a risk of a carrier exiting a route, and therefore lessening competition and consumer choice on that route in the long term,” it added.

According to Mavcom, the Kota Kinabalu – Sandakan route was served by AirAsia (18 weekly trips), Malaysia Airlines (seven weekly trips) and MASwings (21 weekly trips) as at December 2017.

On Jan 29, the commission approved AirAsia’s application for seven additional trips per week, bringing the total number of trips for AirAsia for this particular route to 25 weekly trips.

In February 2018, AirAsia applied for a further additional seven weekly trips on this route which the commission did not approve because of a risk of overcapacity which would inconvenience consumers.

Meanwhile, the Kuala Lumpur – Haikou route was served by Malaysia Airlines (two weekly trips) and Malindo Air (two weekly trips) as at December 2017. AirAsia had previously operated this route but terminated its services in 2012.

On Feb 21, 2018, AirAsia applied to operate seven weekly trips on this route and the commission awarded AirAsia four weekly trips on April 3, 2018. The decision to approve four weekly trips instead of seven was also due to risk of overcapacity.

“The ATR allocation process itself was designed following close consultation with all Malaysian carriers, including AirAsia. The principles and criteria applied in any ATR allocation has also been made known to all Malaysian carriers,” it said.

However, Mavcom has indicated to AirAsia that it can resubmit its application for both routes in October 2018.

As at April 30, the commission has awarded a total of 397 ATRs to Malaysian carriers since its initiation, of which 295 were taken up while 102 were either not used or were surrendered back to Mavcom.