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What AirAsia and Mavcom mean by ‘refunds’ and ‘reimbursement’

AirAsia is told to explain its stand on refunds as many passengers both local and international are still waiting for reimbursement despite its statement that 'nearly everyone' has been paid back.

Lee Tick Seng
4 minute read

I refer to the news dated June 10 titled “AirAsia pledges to fulfil refund requests” and “Petition launched to gather passengers in class action suit against AirAsia”.

Capital A Group CEO Tony Fernandes said in a statement that “AirAsia airlines have already paid back nearly everyone. AirAsia has opened the world to so many people and the majority of our guests decided to take a credit shell to help us which we thank them for.”

Meanwhile, AirAsia X CEO Benyamin Ismail said they understand guests’ frustrations and will ensure they get back what they paid for future use, in the form of full credits for such amounts paid, by way of travel vouchers.

Two years ago, I booked an AirAsia flight to Australia. However, the flight was cancelled by AirAsia due to the Covid-19 pandemic. AirAsia then decided to issue credit accounts without offering other refund options. The truth is that all passengers like me want a refund and not by way of credit account or travel voucher. By holding back passengers’ money, can AirAsia clarify what it meant by saying that it has already paid back almost all passengers?

According to the Cambridge Dictionary, “refund” means an amount of money that is given back to you, especially because you are not happy with a product or service that you have bought, and “reimbursement” means the act of paying back money to someone who has spent it for you or lost it because of you, or the amount that is paid back.

AirAsia’s stand on refund by way of issuing credit account or travel voucher is grossly unfair to air travel consumers as follows: –

(1) it is not only neither a refund nor a reimbursement but also in violation of Mavcom’s refund procedure;

(2) it is issued solely in the interest and benefit of AirAsia;

(3) flights were cancelled by AirAsia;

(4) the Covid-19 pandemic affected all parties including passengers like me;

(5) AirAsia has no legal right to retain passengers’ money after failing to deliver services as promised;

(6) AirAsia denied air travel consumers’ right to a refund;

(7) refund is merely for tickets purchased and not compensation for other travelling expenses and accommodation bookings;

(8) the use of credit account is subjected to the biased terms and conditions of AirAsia;

(9) passengers were forced to receive credit accounts without other refund options; and

(10) passengers are forced to fly again at higher fares as the original offer and acceptance has expired.

Obviously, AirAsia’s stand on refunds is misleading and needs clarification as there are many local and international passengers like me whose cases were also considered resolved by AirAsia and who are still waiting for a refund from AirAsia.

I then lodged a complaint with Mavcom regarding AirAsia’s rejection of my request for a refund. I was surprised and disappointed that Mavcom also rejected and closed my case without giving any valid reasons and asked me to deal directly with AirAsia myself.

However, what puzzled me the most is that Mavcom, on Nov 12, 2021, published an announcement on its official website as follows: –

Mavcom To Exercise Its Statutory Powers If AirAsia X Berhad Does Not Reimburse Air Travel Consumers for Tickets Purchased

In line with the Malaysian Aviation Commission mandate to regulate economic and commercial matters relating to civil aviation in Malaysia and its commitment to protecting air travel consumer rights, Mavcom, on Nov 11, 2021, had issued a letter to AirAsia X Bhd (AAX) in response to its ongoing debt restructuring exercise. This letter follows from Mavcom’s earlier correspondence with AAX.

In this letter, Mavcom clearly and unequivocally urged AAX 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. Mavcom takes the view that air travel consumers ought not to be classified as “creditors” as the air travel 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 air travel consumers for the tickets purchased.

If AAX fails to reimburse the affected air travel consumers accordingly, Mavcom will not hesitate to exercise its powers under the Malaysian Aviation Commission Act 2015 (Act 771).

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

Mavcom is committed to discharging its duties under Act 771 and the Malaysian Aviation Consumer Protection Code in ensuring that air travel consumer rights are safeguarded.

Obviously, Mavcom’s stand on AirAsia’s refund policy is also misleading and needs clarification as there are many local and international passengers like me whose cases were also considered resolved by AirAsia and who are still waiting for a refund from AirAsia.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.