MAVCOM Urges AirAsia X To Reimburse Passengers With Tickets

AirAsia X in October offered to cover 0.5% of its outstanding debt to creditors, including ticket holders, in a bid trying to restructure the mounting debt and not having to liquidate (read more here).

Malaysian Aviation Commission on Friday released a statement that it would use its statutory powers if AirAsia X wouldn’t voluntarily honor and refund tickets.

You can access AirAsia X here.

Announcement from Malaysian Aviation Commission (MAVCOM):

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’s (“MAVCOM”) mandate to regulate economic and commercial matters relating to civil aviation in Malaysia and its commitment to protecting air travel consumer rights, MAVCOM, on 11 November 2021, had issued a letter to AirAsia X Berhad (“AAX”) in response to its ongoing debt restructuring exercise. This letter follows from MAVCOM’s various earlier correspondence with AAX.

In this letter, MAVCOM has clearly and unequivocally urged AAX to reassess its proposal to treat air travel consumers as creditors and to pay only 0.5 per cent of the value of tickets purchased as announced on 18th October 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 their 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.

Conclusion

These various AirAsia’s around Asia are loosely tied together under the main brand while having different owners and investors. So it wouldn’t surprise me if some of them folded.

You have to remember that passengers with outstanding tickets are creditors and likely won’t recover anything if an airline completely folds. I am not sure whether there is a difference between getting back 0.5% someone paid or zero.

How eager would Malaysians be to buy AirAsia X tickets if they continued flying without honoring existing purchases?