Consumers body raps ‘toothless’ Mavcom over AirAsia ticket refunds

The Malaysian Aviation Commission (Mavcom) has been urged to take a firm stand regarding refunds for flight tickets cancelled since early 2020 due to movement restrictions and border closures brought on by the Covid-19 pandemic.

The Federation of Malaysian Consumers Associations (Fomca) said the issue had dragged on for two years now with many customers still waiting for the low-cost airline to return their money.

Fomca CEO Saravanan Thambirajah also described Mavcom as “toothless” for failing to act against AirAsia and instead allowing the company to ignore the rights of consumers.

“This is wrong,” he said. “AirAsia should return its passengers’ money.”

Speaking to MalaysiaNow, he said the problem was not with the existing laws and policies which he added were enough to protect the well-being of consumers.

Rather, he said, the issue lay in the lack of enforcement on the part of Mavcom, the country’s regulator for economic and commercial matters related to civil aviation.

He said many were unaware about consumer rights and depended on Mavcom to protect their rights in relation to flight matters.

“The consumer code is very clear: in the event of a cancellation, the company has 30 days to return the customer’s money,” he said.

“But Mavcom is not very strict about this, and many end up just waiting.”

AirAsia shut down its flight operations during the movement control order implemented by the government as part of efforts to curb the spread of Covid-19 in mid-March of 2020.

Many passengers had requested refunds for their tickets but two years later, a large number of them are still waiting.

Those who spoke to MalaysiaNow told of their efforts to recover their money and their disappointment with Mavcom which they said had failed to protect their rights.

On Nov 12 last year, AirAsia said in a statement that its RM33.65 billion debt settlement scheme for AirAsia X had been approved by 99% of its creditors through a vote at a meeting held that day.

It said the proposed debt restructuring approved by the High Court would likely be completed in the first quarter of 2022.

Upon agreeing to the proposal, it said, consumers would receive 0.5% of the total ticket price paid, as well as some of the profit earned from the financial years of 2023 to 2026.

Creditors were also guaranteed to receive travel credit that could be used for flight tickets or goods and services provided by AirAsia X in the future, after the international borders reopened.

But Saravanan said this was unfair as customers had made payments in full for tickets with some amounts reaching thousands of ringgit.

He said AirAsia should return its customers’ money before getting court approval for its debt restructuring measures.

“We understand that the company is facing financial pressure, but only returning 0.5% of the ticket price is extremely unfair,” he added.

“If Mavcom is firm with AirAsia, customers might be able to get their money back before AirAsia X gets approval from the court.”

When contacted by MalaysiaNow about the matter, Mavcom acknowledged communicating with a complainant – Shahril Amir Muhamad, whose story MalaysiaNow previously reported.

However, it said since his repayment claim was part of AirAsia’s debt restructuring, it would continue to monitor the matter as it needed to comply with the legal process.

“Mavcom remains committed to protecting the rights of consumers, and will continue discussions with AirAsia X regarding the matter until a refund is made,” it said.