MAHB and AirAsia lock horns

SEPANG, 8 February 2019 – Malaysia Airports Holdings Berhad (MAHB) has rejected AirAsia’s offer of mediation, in a letter sent by the airport operator’s lawyers.

AirAsia had proposed mediation to MAHB in an attempt to amicably resolve the parties’ ongoing dispute over passenger service charges at klia2.

The Mavcom Act requires AirAsia and MAHB to first seek mediation before resorting to other legal proceedings, in order to potentially save time and costs for all parties involved, including the judicial system.

AirAsia said in its statement that it “acted in good faith to comply with the Act and prevent further public discourse which it believes is damaging to the aviation sector.”

AirAsia added: “Regardless of the outcome, mediation would allow both parties to move forward in a more informed manner.”

AirAsia Malaysia CEO Riad Asmat said: “We regret that MAHB has refused AirAsia’s olive branch to resolve outstanding issues between us through mediation, particularly in light of MAHB’s recent statement that it is ‘optimistic that these matters can and will be resolved’.

“We will seek guidance from Mavcom on the next steps to address this situation. However, we reserve our rights to take all necessary actions to protect the interests of our guests and shareholders.”

Earlier AirAsia served notice on Malaysia Airports (Sepang) Sdn Bhd (MASSB), a wholly owned subsidiary of Malaysia Airports Holdings Berhad (MAHB), 31 January, claiming almost MYR480 million for losses incurred from operating at klia2.

AirAsia listed its losses totalling MYR479,781,285, the main part coming from loss of customers in the last four years, owing to disruptions and poor condition of the terminal.

In the notice to commence mediation served on MASSB, AirAsia Berhad and its long-haul sister airline AirAsia X Berhad said that MASSB had provided a “poor level of service” at the terminal, resulting in losses and damage to the two carriers.

These include cancellations and loss of revenue from multiple runway closures, apron defects, damage to two aircraft due to malfunctions in MASSB’s infrastructure and sensors, a fuel line rupture at klia2 Pier P, internet outages and loss of customers.

AirAsia Berhad and AirAsia X Berhad are jointly seeking mediation in accordance with Section 74 of the Malaysian Aviation Commission (Mavcom), which requires the dispute to first be resolved in good faith through mediation.

Under the Act, if mediation fails, Mavcom will arbitrate the dispute.

Both AirAsia Berhad and AirAsia X Berhad said at the end of January that they hoped to settle the issue amicably and had refrained from filing a counterclaim in court to pursue mediation, as required by the Mavcom Act.