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AirAsia and AirAsia X fined RM200K each for charging processing fees

Malaysian Aviation Commission (MAVCOM) has fined AirAsia Bhd and AirAsia X Bhd RM200,000 each for charging processing fees on credit card, debit card and online banking transactions. According to the official statement, this is in line with their efforts to protect consumers from being unfairly charged by airlines.

The updated Malaysian Aviation Consumer Protection Code (MACPC) which came into effect on 1st June 2019 requires airlines to provide full disclosure of the final price of the airfare. The commission has been monitoring for compliance with the new provisions and they have found AirAsia and AirAsia X to contravene subparagraph 3(2) of the MACPC. MAVCOM has issued show-cause letters to both airlines and had given them opportunities to provide factors to mitigate the quantum of the penalties.

The Commission is empowered to impose a penalty not exceeding RM200,000, and in the case of second or subsequent noncompliance, an amount ten times of the financial penalty which was imposed for the first non-compliance. After a thorough evaluation and taking into consideration the written representatives by the airlines, the Commission has imposed a penalty of RM200,000 each to AirAsia and AirAsia X for the first violation of subparagraph 3(2) of the MACPC, for the period commencing 1 June to 9 August 2019.

At the time of writing, AirAsia is still charging a processing fee for card transactions unless it is made via BigPay prepaid card. According to AirAsia, the processing fee is used for ongoing administrative, maintenance and development costs of AirAsia’s online systems to ensure a secure and safe booking environment.

In July, the low-cost airline had announced the removal of processing fees and it will take effect from 1st October 2019. The removal of the fee will be applicable for bookings made for flights within, to and from Malaysia. For other countries such as Thailand, Indonesia and the Philippines, the processing fee will be removed by 31st December 2019.

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Apart from AirAsia and AirAsia X, MAVCOM has also imposed a penalty of RM1,179,889 on Malaysia Airports (Sepang) Sdn Bhd, a subsidiary of MAHB. The penalty was imposed for not meeting selected Quality of Service targets for KLIA and klia2 for the first quarter of 2019. According to the statement, the Commission is authorised to impose an amount not exceeding five per cent of MA Sepang’s annual turnover.

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Alexander Wong