AirAsia: MyCC failed to consider submission on procedural fairness

KUALA LUMPUR: The Malaysia Competition Commission (MyCC) failed to consider AirAsia Bhd's submission on procedural fairness in the commission's case against AirAsia's share-swap agreement with Malaysian Airline System Bhd (MAS), the Competition Appeal Tribunal heard last Friday.
In its notice of appeal, AirAsia said its submission on procedural fairness was particularly on issues of no opportunities to be heard, procedural impropriety and no access to investigation papers and working files.
AirAsia lawyer Leonard Yeoh said the airline was denied natural justice and procedural fairness as MyCC had failed to provide AirAsia access to documents that it deemed crucial to its defence.
The documents include two letters from MAS to MyCC, which stated among other items, that its decision to withdraw Firefly routes were due to reasons that were economic in nature. The four routes were from Kuala Lumpur to Kuching, Kota Kinabalu, Sibu and Sandakan.
It also said that the commission failed, neglected and/or refused to consider that AirAsia has reserved all its rights on the commission's finding that AirAsia and AirAsia X Sdn Bhd comprise a single economic unit.
AirAsia and MAS were presenting the summary of their respective appeals at the rebuttal session held last Friday.
On April 11 last year, MyCC found both airlines guilty of anti-competition practices under Section 4(2)(b) of the Competition Act 2010, by entering into a share-swap agreement in 2011, which was subsequently called off by Khazanah Nasional Bhd in 2012.
MyCC slapped a fine of RM10 million each on both airlines. Both airlines are appealing against MyCC's findings and fine.
In its rebuttal, AirAsia said MyCC had wrongfully applied the Competition Act 2010 retrospectively to the withdrawal of routes by MAS, which took place prior to the Act's commencement on Jan 1, 2012.
It also said that the commission had failed, neglected and/or refused to sufficiently consider the Collaboration Agreement dated Aug 9, 2011 was subject to an antitrust condition precedent and had not become binding on the parties.
According to AirAsia, the commission erred by concluding that the Agreement had as its object the sharing of market within the air transport services sector in Malaysia and that the Agreement resulted in an outcome whereby Firefly withdrew from the four routes.
It said that the commission had failed, neglected and/or refused to sufficiently consider or consider at all that the withdrawal of Firefly from the four routes was a unilateral and independent decision by MAS as a result of heavy losses incurred by Firefly and that the four routes were never a part of the Agreement.
Another AirAsia lawyer, Tay Beng Chai said when Firefly was terminated, nothing was given up to AirAsia as MAS took over the jets, flight attendants and the livery, thus competition remained.
Earlier, MAS lawyer Logan Sabapathy said Firefly was terminated as it was suffering losses and that it would not be practical for it to revive Firefly's routes merely for some semblance of competition.
AirAsia also said that MyCC failed to identify the relevant market in the context of competition law and to consider the net economic benefit of the collaboration and Agreement.
The case is now pending a decision by the Competition Appeal Tribunal panel headed by High Court Justice Hasnah Mohamed Hashim.