Malaysia has the 2nd-highest number of private jet flights operating without a valid AOC in Asia after China, according to industry survey

by RAHIMI YUNUS / (TMR PIC is only for illustration purpose)

SUBANG aviation cluster in Selangor is fast becoming a hub for illegal charter flights that are operating below the authorities’ radar, posing serious safety risks to passengers, while eating into the business of licensed operators.

According to an industry survey by the Asian Business Aviation Association (AsBAA), Malaysia has the second-highest number of private jet flights operating without a valid air operator certificate (AOC) in Asia after China.

“Firstly, insurance does not cover for any accident that may happen with the flights. These illegal operations threaten the country’s aviation safety reputation.

“Secondly, we have operators who spend millions applying for AOC or foreign AOC (FAOC) and adhere to the regulations, but the illegal jet charter operators do not and get to do the businesses,” an AsBAA Malaysia chapter head Aida Ismail told The Malaysian Reserve (TMR).

The illegal movements — also known as “grey charters” — are unlicensed jet charter operations that are usually provided by aircraft owners who are not governed by the same strict regulations as an AOC holder.

In Malaysia, it is the 9M-AOC, dubbed the “Niner Mike”. There are also licensed operators who utilise their aircraft beyond the remit of their licences.

Currently, legally hired aircraft must be operating with an AOC, following the regulations established by the US Federal Aviation Administration under FAR Part 135 and flown by commercial pilots.

Part 135-certified aircraft is subject to rigorous safety standards for maintenance, flight operations, ground operations, crew experience and training, among others.

Simply put, grey charters are illegitimate private jet operations akin to unlicensed air taxis.

Aida said aircraft owners or operators may not be aware of the regulations and take on passengers for hire in exchange for payment, not realising they are offering illegal charter services.

Similarly, passengers and sometimes pilots of the aircraft are oblivious that the flight is illegal.

An industry source said during the Sabah state election period in September, about eight out of 10 private jet flights were likely illegal charters.

Before the Covid-19 pandemic, the source said the ratio was fairly 50-50. “Nearly everyone in Subang is doing it. Whoever owns an aircraft in Subang largely does it. Most of the assets are managed by companies. “They want to supplement their income, for example, by paying for the hangar and reducing operating cost in general,” the source, who requested anonymity, told TMR. The source said people who need a flight usually refer to either

brokers, companies, or someone they know having aircraft in Subang — the country’s business aviation (BizAv) hub — to hire the illegal charter flights, either knowingly or not.

The source said the grey charters in Subang are fuelled by the high demand that has outnumbered supply.

The source added that there are only two dedicated charter jet services in Subang, provided by Asia Jet Partners Malaysia Sdn Bhd for local AOC and TAG Aviation Asia for FAOC.

“If the two aircraft fly on the same day, that’s it, you don’t have any more planes. The next available flight will probably be from Hong Kong or Singapore.

“If the client wants to get the flight from Hong Kong, he needs to pay positioning charges to fly the aircraft from Hong Kong to Subang, and later back to Hong Kong empty,” the source said.

The source said there are likely over 15 jets in Subang that are actively doing illegal charter operations.

In 2014, it was estimated that illegal charters accounted for between 20% and 40% of business flights in the Middle East, FlightGlobal reported.

The source said the lack of charter planes in Subang is largely the result of a longer timeline for an aircraft registry, which typically takes one and a half years the earliest, compared to other parts of the world.

For instance, the source said Hong Kong takes only two months, San Marino three weeks and Guernsey two weeks.

Aida said in a recent discussion with Transport Ministry and Civil Aviation Authority of Malaysia, the regulator eyes reducing the aircraft registry timeline to two months with complete documentation.

Despite certain circumstances, she said AsBAA acknowledged that Malaysian authorities in Malaysia are doing their best to support and enhance the development of BizAv in the country.

As it is, Aida said AsBAA is in talks with the governing agencies to tackle grey charters, and among the proposals are to improve 9MAOC registry processes and penalties for the fraudulent operators.

The association proposed a penalty of US$50,000 (RM202,600) per grey charter offence in Malaysia.

Aida said the quantum is very little considering the safety aspects at risk and compared to the millions of dollars of fines imposed in the US and China.

“We hope it will give a very good warning, as safety must not be compromised,” she added.