New aviation bill to better position sector for AEC

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KUCHING: The Parliament passing a new bill called the Malaysian Aviation Commission Bill 2015will pave the way for a new commission known as the Malaysian Aviation Commission (MAC), said to be a boost for local fliers in its path towards the Asean Economic Community (AEC).

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) said while there are two existing main bodies overseeing the aviation industry – the Ministry of Transportation (MOT) and the Department of Civil Aviation (DCA) – it believes the addition of MAC would provide a more structured path to boost the growth of the aviation
industry.

“The newly-established MAC focuses on the economic aspects of the aviation industry, different from the DCA’s role which covers air traffic management, airworthiness, flight operations, aviation security and so forth.

“On the other hand, the MOT focuses on ensuring all rules in air transport/aviation are in accordance with the International Civil Aviation Organisation (ICAO) and implementing infrastructural projects to meet the demands of air transport,” it explained.

The NEW MAC will take over from the MOT (via the DCA) for the issuance and renewal of air service licenses (scheduled services) and permits (non-scheduled services).

In addition, MAC will also be responsible to administer, allocate and manage air traffic rights and slot allocations. These approvals can be suspended or revoked by MAC should non-compliance be found.

“We believe the MAC would better position Malaysia to take advantage of the implementation of the ASEAN Open Sky policy under the AEC,” MIDF Research opined.

“Furthermore, on the back of a tragic year for the Malaysian aviation industry, we believe the commission could also improve consumer confidence towards the aviation sector,it added.

The new bill entails several clauses aimed at promoting healthy competition among airlines.

One of the main objectives of the MAC is to encourage effective competition which allows Malaysian carriers to maintain their ability to compete effectively in a sustainable, profitable, efficient and fair manner.

“While we believe that the likelihood of M&A or collusive activity is slim, MAC could regulate air fares or excessive capacity expansion to prevent instances of fare dumping, price wars and overcapacity issues as seen in recent years.

“This would bode well for airline players in the form of higher yields and better load factors.”

Any complaints pertaining to any aviation service may be lodged by a consumer to MAC which may establish a committee to hear and determine an appropriate compensation.

“We are positive that the protection of consumer rights is highlighted,” it further said, nothing that the move would help keep airlines on their toes with regards to issues such as flight delays, cancellations and poor services.

“This would not only help in boosting consumer sentiment but also the competiveness of airlines.”