Matta: Mavcom should protect consumers, not allow airlines to dictate terms of refund

KUALA LUMPUR, April 14 — The Malaysian Association of Tour and Travel Agents (Matta) has criticised Malaysian Aviation Commission (Mavcom) for allowing airlines leeway to refuse giving consumers refund during the Covid-19 pandemic.

Matta president Datuk Tan Kok Liang said the commission should instead ought to ensure consumers, including travel agents acting on behalf of their clients, obtain their due refunds without delay or offer equitable solutions acceptable to ticket holders.

“Mavcom’s function is also to provide a mechanism for protection of consumers. The least it can do is to accept this extraordinary challenge and provide a timeline plus a mechanism for refunds and provide options and solutions both to airlines and consumers,” Tan said in a statement.

“By allowing airlines to dictate terms at its commercial discretion especially during this time of crisis is poor supervision and governance.

“Mavcom should consider the drastic impact to consumers if any of the airlines were to go into liquidation. What goodwill be the value of the vouchers and points then? What if foreign airlines choose to cease operations in Malaysia? Has Mavcom taken all of these factors into account?” he asked.

Last week, Mavcom had said it was providing flexibility for airlines to resolve consumer complaints and refund requests, given the current challenging circumstances, but urged airlines to resolve these issues as timely as possible.

With airlines already indicating approximately over 13.6 million seats cancelled due to the outbreak, Tan had earlier expressed concerns over the hundreds of millions of consumers’ money currently stuck with airlines operating in Malaysia.

He then cited how regulators in the United States and the European Union have generally instructed airlines to refund ticket holders their monies.

“Why must airlines be allowed to delay refunds when they are not the only business affected by the pandemic? This is akin to telling every business that credit vouchers will suffice instead of refunds,” he said.

In a further tirade against Mavcom, Tan said it was ironic that all passengers except those on transit, children below two-years-old and passengers using the Rural Air Services in Sabah and Sarawak were made to pay RM1 levy to Mavcom since May 1, 2018.

“Perhaps it is time for Mavcom to cease collections due to its failure to protect consumers,” he added.

Despite reiterating that Matta was sympathetic to the adverse conditions of the commercial aviation sector, Tan however said Matta stood firm in its position that taking deposits for future services and the inability to provide refunds was not prudent financial management.

Instead, he suggested that customers’ deposits ought to be placed in a designated or trust account until services are rendered.

Tan also said the International Air Transport Association should now insist airlines provide financial security to protect travel agents and passengers, should the airlines close.

He also urged the government to study the possibility of providing financial support in the form of soft loans to the local aviation industry to sustain in this period as the industry was crucial to the eventual recovery of the travel and tourism industry.