AAX urged to reimburse consumers on tickets purchased

by TMR / pic by TMR FILE

AIRASIA X Bhd (AAX) has been told to reassess its proposal to treat air travel consumers as creditors and to pay only 0.5% of the value of tickets purchased as announced on Oct 18, 2021, Malaysian Aviation Commission (Mavcom) said.

In a recent statement, Mavcom said “it takes the view that air travel consumers ought not to be classified as creditors as the consumers did not, inter alia, sell any products, provide services or make loans to AAX but instead have paid monies for the purchase of tickets in advance of their flights”.

“Accordingly, Mavcom reiterates its position that AAX should reimburse the consumers for the tickets purchased. If AAX fails to reimburse the affected consumers accordingly, Mavcom will not hesitate to exercise its powers under the Mavcom Act 2015 (Act 771),” the civil aviation regulator said in a statement.

Last week, The Malaysian Reserve (TMR) reported that former Mavcom chairman Dr Nungsari Ahmad Radhi said AAX should not treat its customers as creditors.

All forward sales cannot be dishonoured this way, not only for aviation, but also for other form of businesses, he said.

“Creditors took the risk to finance or give loans to AAX, but it sold tickets in advance to passengers and did not deliver the promised service. It is ridiculous and a bad precedent if this is allowed,” Nungsari told TMR.

“I know that’s their proposal to their creditors, which is half sen for every RM1, but passengers are customers, not creditors,” he added.

The aviation commission has stressed its commitment to discharge its duties under the Malaysian Aviation Consumer Protection Code to ensure that air travel consumer rights are safeguarded.

On Nov 11, 2021, Mavcom issued a letter to AAX in response to its ongoing debt restructuring exercise.

According to Mavcom, “AAX has repeatedly in its correspondence with Mavcom and in their statements made to the public, given the assurance that AAX is committed to reimburse its consumers who were not able to fly due to flight cancellations”.

Meanwhile, AAX’s debt-restructuring proposal received more than 95% support from creditors in meetings last Friday as the debt-laden budget carrier tries to stay afloat.

The airline received full support from two classes of creditors on its proposed debt restructuring and 97.6% from the third group, it said in separate statements to the Malaysian stock exchange.

AAX needed at least 75% support from each class of creditors, which include Airbus SE, BOC Aviation Ltd and Rolls-Royce Holdings plc.

As part of the deal, Airbus has agreed to reduce AAX’s orders to 15 A330neos and 20 A321XRLs, an AAX spokesperson said.

The airline was the world’s biggest customer for the wide-body A330neo, with 78 on order, according to the French planemaker’s website. It also had an order for 30 of the narrow-body A321XRL jets.