Mavcom explains rejection of AirAsia's application to increase flights on two routes

14 Jun 2018 / 01:34 H.

    PETALING JAYA: AirAsia’s application to increase frequency for its Kuala Lumpur to Haikou and Kota Kinabalu to Sandakan routes were rejected due to concerns of overcapacity, said Malaysian Aviation Commission (Mavcom).
    “In allocating air traffic rights (ATRs), the commission wishes to facilitate orderly growth while also considering the risk of overcapacity (where the supply of seats far exceeds passenger demand) on a particular route,” it said in response to a news report by local media.
    Mavcom said that the ill effects of route overcapacity include heightened risks of unutilised seats. This could lead to flight cancellations and merging of flights, which are detrimental to passenger convenience.
    “In addition, overcapacity gives rise to a risk of a carrier exiting a route, and therefore lessening competition and consumer choice on that route in the long term,” it added.
    According to Mavcom, the Kota Kinabalu - Sandakan route was served by AirAsia (18 weekly trips), Malaysia Airlines (seven weekly trips) and MASwings (21 weekly trips) as at December 2017.
    On Jan 29, the commission approved AirAsia’s application for seven additional trips per week, bringing the total number of trips for AirAsia for this particular route to 25 weekly trips.
    In February 2018, AirAsia applied for a further additional seven weekly trips on this route which the commission did not approve because of a risk of overcapacity which would inconvenience consumers.
    Meanwhile, the Kuala Lumpur - Haikou route was served by Malaysia Airlines (two weekly trips) and Malindo Air (two weekly trips) as at December 2017. AirAsia had previously operated this route but terminated its services in 2012.
    On Feb 21, 2018, AirAsia applied to operate seven weekly trips on this route and the commission awarded AirAsia four weekly trips on April 3, 2018. The decision to approve four weekly trips instead of seven was also due to risk of overcapacity.
    “The ATR allocation process itself was designed following close consultation with all Malaysian carriers, including AirAsia. The principles and criteria applied in any ATR allocation has also been made known to all Malaysian carriers,” it said.
    However, Mavcom has indicated to AirAsia that it can resubmit its application for both routes in October 2018.
    As at April 30, the commission has awarded a total of 397 ATRs to Malaysian carriers since its initiation, of which 295 were taken up while 102 were either not used or were surrendered back to Mavcom.

    thesundaily_my Sentifi Top 10 talked about stocks