Mavcom recommends maximising air connectivity under master plan

A passenger takes pictures of a Malaysia Airlines plane at the Kuala Lumpur International Airport March 16, 2014. — Reuters pic
A passenger takes pictures of a Malaysia Airlines plane at the Kuala Lumpur International Airport March 16, 2014. — Reuters pic

KUALA LUMPUR, Feb 11 — The Malaysian Aviation Commission (Mavcom) today unveiled its long-awaited Economic Master Plan (EMP) 2021-2030 which contained recommendations for the development of the civil aviation sector with the objective of maximising air connectivity.

Chief operating officer Azmir Zain said long-term recommendations needed to be implemented in a comprehensive rather than a piecemeal manner for it to be effective.

To achieve the objective, he said Mavcom had outlined three strategic pillars — creating a fair and competitive commercial environment, establish appropriate airports infrastructure and attract strong human capital.

For the first pillar, the commission advocates a robust competitive environment between industry players to develop a high-performing civil aviation sector, whereby Malaysia’s legal and framework facilitate such an environment.

It said the need to minimise government interference in favour of any particular industry player was essential while sound competition laws must be in place to ensure a level-playing field for industry players.

“The appointment of senior management officials (in Malaysia Airports Holdings Bhd — MAHB) should be made at the commercial level,” Azmir told a press conference after presenting the plan.

Secondly, the development of airports in Malaysia should be given appropriate emphasis in charting out the long-term direction of the country’s civil aviation industry.

Therefore, appropriate airports infrastructure that is efficient and effective in terms of financial performance and service delivery should be made available in Malaysia.

As for the third pillar, Mavcom has recommended the establishment of a strong civil aviation-related human capital base to support the development of the sector.

Among the implementation proposals are establishing human capital database and human capital development working committee for the sector, as well as setting up a pool training fund.

At the same event, Mavcom also released its report on ‘The Economic Impact and Implications of Malaysia Civil Aviation Authority’s (CAAM) Rating Downgrade’ following the United States’ Federal Aviation Administration (FAA) downgrade to Category 2 in November 2019.

Azmir said Malaysian carriers would face a potential revenue-at-risk worth RM360.8 million and RM10.8 million for aerodrome operators due to the downgrade.

The regulator estimated a larger revenue loss of RM4 billion this year if the US FAA audit triggers similar audits by other civil aviation authorities, particularly in China, Japan and South Korea, based on Thailand’s downgrade experience, he said.

For aerodrome operators, the potential revenue-at-risk for this year is estimated at RM400 million, he added.

“Indirectly, the downgrade may affect CAAM’s oversight effectiveness, cost of doing business by industry players, Malaysia’s attractiveness as an aviation investment destination, and the country’s credibility in international civil aviation sector,” he said.

Meanwhile, Mavcom executive chairman Dr Nungsari Ahmad Radhi said the downgrade would have a minimal direct impact on passenger growth and Malaysian carriers’ profitability in the foreseeable future given the low volume of passengers between US and Malaysia.

He said Mavcom, however, had revised downward its passenger growth forecast for this year to between 4.6 and 5.7 per cent from the initial growth of 5.0-6.0 per cent due to the 2019 novel corona virus outbreak.

“From these recommendations, we need to improve our connectivity of Malaysia Airports Holdings Bhd as well as to help airlines get a better yield, especially during this tough times,” he added. — Bernama

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