Should the proposal be approved, the roles of Mavcom would be returned to CAAM and the aviation division under MoT

By P PREM KUMAR & ALIFAH ZAINUDDIN / Graphic By TMR

THE Malaysian Aviation Commission (Mavcom) — formed on March 1, 2016, to regulate economic and commercial matters related to civil aviation — might be disbanded as part of the government’s move to control expenditure, while regaining control over key decisions pertaining to the aviation industry.

Sources close to the development told The Malaysian Reserve that the proposal to disband Mavcom is currently being evaluated by the Transport Ministry (MoT), and the mechanism is rather similar to the dissolution of the Land Public Transport Commission (SPAD) which is now an agency under the ministry.

Should the proposal be approved by the Cabinet, the functions of the regulator are expected to be returned to the Civil Aviation Authority of Malaysia (CAAM) and the aviation division under the MoT.

“Both CAAM and the aviation division were regulating the industry before Mavcom came into the picture, so it shouldn’t be a tedious process,” the sources said.

Among the factors considered in the proposal are the remuneration packages offered to Mavcom’s management, as well as its high operating cost which includes rental at Menara 1 Sentrum near Kuala Lumpur Sentral.

Mavcom, which is barely three years old, was established to also oversee consumer rights, apart from administering commercial operations at airports.

Its establishment was first proposed in the 11th Malaysia Plan as a means to better structure the civil aviation industry.

It has, however, been a point of contention since Pakatan Harapan took over. Following SPAD’s dissolution in May last year, many parties had called for a similar exercise on Mavcom due its purported lack of effectiveness in addressing several key issues faced by the industry.

Mavcom’s inability to pacify all stakeholders in the dispute on the passenger service charges and its wait-and-see approach on the ongoing dispute between AirAsia Group Bhd and Malaysia Airports Holdings Bhd have been a thorn in the regulator’s side.

The issues, on top of Mavcom’s RM25 million operational costs per annum, had prompted many to question the enforcement agency’s role.

Its function can also be seen as overlapping with CAAM, which plays the role of a technical regulator.

CAAM was created as an autonomous regulator to oversee safety, maintenance and security aspects of the industry, taking over the former functions of the Department of Civil Aviation.

Prime Minister (PM) Tun Dr Mahathir Mohamad had previously said agencies with duplication of roles will be disbanded.

Mavcom also came under fire after it was revealed that its former executive chairperson Tan Sri Gen (Rtd) Abdullah Ahmad was paid with an exorbitant monthly salary of RM85,000, which is more than four times the monthly pay package paid to the PM.

Dr Nungsari Ahmad Radhi, a prominent economist and former Umno politician, subsequently replaced Abdullah as the new executive chairman.

In his new role, Nungsari agreed to take a pay cut in the monthly pay package, which is set at RM15,000, equivalent to an 82.35% or RM70,000 reduction in the monthly salary earned by his predecessor.