Commission refutes Suasa, Eaglexpress claims

KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) has refuted allegations by Suasa Airlines Sdn Bhd and Eaglexpress Air Charter Sdn Bhd that it has not played its role in encouraging the aviation industry to grow but has instead suppressed it.

The commission said in a statement it had rejected Suasa Airlines’ application on July 22 2016 to operate a non-scheduled commercial flight from Kuala Lumpur to Langkawi as it did not possess an air service permit (ASP).

However, it said on the same day, Suasa Airlines continued to operate this flight on the pretext of a “demonstration flight”.

The return “demonstration flight” from Kuala Lumpur to Langkawi carried 140 passengers and was not considered a “demonstration flight” as per International Civil Aviation Organisation’s classification.

The commission said it then proceeded to conduct an investigation into the matter.

“Mavcom would like to stress the importance of complying with laws and regulations, which is a fundamental requirement for participation in the industry. It is necessary for airlines to have all regulatory approvals in place before operating.

“Stringent steps taken by the commission is ultimately to ensure a resilient aviation industry as well as to safeguard consumers and, therefore, the commission is firm in its standing and will take actions on offenders that do not comply with the industry laws and regulations.”

Mavcom said on August 30 2016, the commission had granted Eaglexpress an ASP for 12 months (from September 1 2016 to August 31 last year) with specific conditions to be complied with within the stipulated timeframes. Eaglexpress failed to comply with the conditions within the deadlines.

Mavcom revoked the ASP as Eaglexpress was unable to meet the requirements, including converting its negative shareholders’ equity to a positive position and increasing its cash level to RM30 million.

It said Eaglexpress had also applied for a judicial review of Mavcom’s decision to revoke its ASP at the Kuala Lumpur High Court.

On August 14 last year, Eaglexpress’ application was dismissed by the High Court with costs of RM10,000 to be paid by Eaglexpress to Mavcom.

“This case of Eaglexpress as well as the earlier case with Suasa Airlines are clear indications to potential and current industry players that operating an airline (chartered or scheduled) is extremely challenging and requires a high degree of planning, financial depth, operational know-how and execution competency.

“A robust commercial foundation and depth are, therefore, necessary prerequisites to be a player in this industry,” it said.