KUALA LUMPUR, June 26 — This week, Putrajaya tabled two Bills to merge the Malaysian Aviation Commission’s (Mavcom) and the Civil Aviation Authority of Malaysia (CAAM), a move that was first suggested in 2019.
Back then in 2020 as it was facing possible dissolution, the Mavcom made public its long-term policy recommendation on what the Malaysian aviation industry needed to thrive globally.
“As we exit from our role as the economic regulator of the aviation sector, we wish to share Mavcom’s views on the industry, and the many possibilities it holds. We trust the recommendations will be given due consideration for the development of the industry and benefit consumers,” Nungsari Ahmad Radhi, its executive chairman then said in February 2020.
The document outlined the three strategic pillars for Malaysia to maximise air connectivity:
- Establishing and maintaining a fair and competitive commercial environment.
- Making available appropriate airport infrastructure that is efficient and effective.
- Setting up a strong civil aviation-related human capital base to support the development of the sector.
However, Mavcom said then that none of the recommendations would be a reality without a stronger delineation of the roles held by the government and its agencies because it found that certain roles held by different parts of the government overlapped and sometimes contradicted each other.
Further, it also said that having a more specific National Aviation Policy (NAP) was crucial to implementing the National Transport Policy launched in 2019. Mavcom proposed that the NAP should:
- Identify objectives and priorities for the development of civil aviation that consider the balance of priorities between economic, safety and security, environmental, and societal imperatives.
- Create overarching policies on the economic management of the industry.
- Provide terms of reference for supplementary guidance, including legislation, regulations, and related plans and strategies.
After checking all these boxes, only then Malaysia will be able to work on the three main strategies to thrust the aviation industry forward.
“The civil aviation industry has been mired by many challenges recently, including air traffic incidents, CAAM’s downgrade, the coronavirus, and allegations of improper conduct,” Nungsari had said then, referring to the downgrade of Malaysia’s aviation safety rating back in 2019.
“The Commission is nevertheless hopeful the right steps will be taken by the industry, in particular the Ministry of Transport and CAAM, to return Malaysia to its rightful position as a resilient aviation hub that is respected globally. We trust the recommendations we publish today will contribute towards making that objective a reality.”
Here are the main points of its recommendations:
1. Establishing a fair and competitive commercial environment
“A high-performing civil aviation sector can only exist in a commercial environment that is fair and competitive,” the policy paper said.
The priority recommendation was to abolish the “golden share” in Malaysia Airport Holding Berhad (MAHB) in its effort to reduce government interference in commercial decision-making.
Currently, government-linked investment companies Khazanah Nasional Berhad and the Employee’s Provident Fund own a 33.2 per cent and a 7.9 per cent stake in the company respectively, but have expressed interest in raising their stakes in a proposal involving a consortium with the controversial Global Infrastructure Partners (GIP) linked to BlackRock, reported as the world’s biggest asset manager with huge investments directly in Israel.
Communications Minister Fahmi Fadzil has insisted that the “golden share” in MAHB would still be jointly-held by Khazanah and EPF at 70 per cent if the deal goes through.
The other suggestions included the enforcement of an updated aviation-related competition law, promoting liberalisation of ownership or equity policies of airlines and Air Navigation Service Provider, and championing the establishment of a community carrier in Southeast Asia.
Overall, it said this would maximise consumer welfare and protect the industry from anti-competitive practices.
2. Availability of efficient and effective airport infrastructure
The next crucial recommendation was to allow airport operators full responsibility of their spending and to promote commercial activities. This, it said, would enhance airport infrastructures and therefore attract more airlines to operate from Malaysia.
“Airlines choose to fly into airports that provide a high degree of operational efficiency and service quality,” the paper said.
Yesterday, Malaysia Airports Holdings Bhd said it expects three new airlines including British Airways, ThaiViet Jet, and 9 Air, to begin operations by the end of this year in the Kuala Lumpur International Airport (KLIA) — making it a total of 70 airlines.
It also aimed to attract 15 more foreign carriers in the next two years.
Mavcom also recommended that:
- Quality of Service (QoS) framework was to be fully implemented in all Malaysian airports.
- Ground-handling sub-sector to be reformed.
- A framework to measure the efficacy of Malaysian airports should be developed.
- Commit to integrated terminals.
In April this year, it was reported that the QoS framework has been implemented in both Kuala Lumpur International Airport Terminals since September 2018, and 20 out of 28 service quality elements have been implemented since then.
Only in July last year, the commission began implementing the framework at the Kota Kinabalu and Langkawi Airports, while Kuching and Miri, Sarawak and Senai International Airports in Johor Baru were currently in the development phase.
Those airports were expected to start implementing the framework by the third quarter of 2024.
3. Establishing a strong civil aviation-related human capital base
High air connectivity and optimal infrastructure are impossible unless supported by effective and efficient human capital not only on the technical side of things but managerial and administrative as well, the paper said.
To achieve this, Mavcom recommended that a baseline needed to be set to develop a coordinated industry-wide talent development plan by establishing a human capital database and a working committee for its talent development.
To nurture a larger pool of talent in the sector, it further suggested setting up a pool training fund and drawing up industry training modules in collaboration with academia, among others.
Read Malay Mail’s explainer on Mavcom, its dissolution and what happens next: All you need to know about: Mavcom’s dissolution and merger with CAAM
