Mav­com: It’s to avoid over­ca­pac­ity

> Ex­plains re­jec­tion of AirAsia’s ap­pli­ca­tion to in­crease Kuala Lumpur-Haikou and Kota Kin­a­balu-San­dakan flights

The Sun (Malaysia) - - SUNBIZ -

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) yes­ter­day.

“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, 2018, 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, 2018, 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.

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