Air passengers' rights are governed by the Malaysian Aviation Consumer Protection Code 2016 (MACPC), which specifies, among other things, the remedies which apply in the event of a flight cancellation and the procedure which airlines must follow when dealing with passenger complaints. The MACPC was issued by the Malaysian Aviation Commission (MAVCOM) pursuant to its powers under Section 69(1) of the Malaysian Aviation Commission Act 2015. The MACPC came into force on 1 July 2016 and seeks to strike the right balance between protecting passengers and industry competitiveness.
Compensation requirements under the MACPC
Pursuant to Paragraph 12(1) of the MACPC, in the event of a flight cancellation, the operating airline must offer compensation to affected passengers. As specified in the First Schedule of the MACPC, passengers must be offered the choice between:
- reimbursement of the full cost of the ticket within 30 days; or
- re-routing travel, under comparable transport conditions, to the passenger's final destination at the earliest opportunity or on a later date at their convenience, subject to seat availability, at no extra charge.
However, Paragraph 12(5) of the MACPC specifies that operating airlines are not obliged to pay compensation if it can be proved that a flight cancellation was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.
According to MAVCOM's statement of 8 April 2020,(1) the COVID-19 pandemic constitutes 'extraordinary circumstances' given that it has resulted in national quarantines and international travel bans by which airlines must abide due to security and safety measures. As a result, MAVCOM is temporarily providing some leeway in terms of how airlines can respond to passenger refund requests.
MAVCOM has released a set of FAQs(2) on flight disruptions caused by the COVID-19 pandemic, which state that the refund options offered to passengers in the event of a flight cancellation due to the COVID-19 pandemic are a commercial decision to be taken by each airline. As such, MAVCOM has advised passengers to contact their respective airline given that each airline is operating under its own terms and conditions during this period.
Further, it appears that, depending on the applicable terms and conditions, airlines can now offer refund options which differ to the usual requirements specified in the First Schedule of the MACPC. At present, every local airline is offering its passengers some form of travel credit or flight date change in lieu of a full reimbursement of the flight ticket cost.(3) While AirAsia has encouraged its passengers to accept travel credit instead of a cash refund, it added that refund requests will be considered on a case-by-case basis. However, this process will take between 12 to 16 weeks due to the high volume of requests.(4)
In the abovementioned FAQs, MAVCOM also specified that airlines are not liable for consequential losses such as accommodation or activity fees for which passengers have already paid. MAVCOM has advised passengers to contact their insurers to make a claim for such losses.
In addition, MAVCOM released a separate statement on 8 April 2020(5) specifying the following temporary changes to the MACPC, which will apply from 1 February 2020 until 30 September 2020:
- The timeline for airlines to remit refunds and resolve complaints – as stipulated under Paragraphs 7A(4) and 17(4) of the MACPC, respectively – has been extended from 30 days to 60.
- The requirement for airlines to communicate information to passengers and the public regarding any change of flight status – as stipulated under Paragraph 8 of the MACPC – has been waived.
In light of these temporary changes, MAVCOM appears to have prioritised the survival of airlines over the interests of passengers during the COVID-19 pandemic. Such an approach may be justified given that the sudden and severe lack of operations and revenue has left airlines at genuine risk of liquidation, which would be detrimental to the entire aviation industry. By granting some leeway to airlines in respect of ticket refund options and complaint response times, MAVCOM has alleviated some of their immediate financial and administrative problems. However, by allowing credit to be issued to passengers in lieu of a cash refund, MAVCOM may have inadvertently exposed passengers to the risk of losing their entire ticket cost if the airline concerned goes into liquidation before the credit is used.
With regard to MAVCOM's waiver of the requirement for airlines to communicate information regarding any change in flight status, while it is understandable why this exemption would apply while the Movement Control Order or any travel ban is in effect (during which almost all flights must be cancelled), it is unclear why MAVCOM has elected for this waiver to be effective until 30 September 2020. The waiver effectively places the burden on air travellers to constantly check the status of their flights. Further, such a lengthy waiver of an airline's duty to promptly inform its passengers about a change in flight status may lead to confusion and unwarranted hardship for passengers once air travel activity increases.
Endnotes
(1) Further information is available here.
(2) Further information is available here.
(3) For example, Malaysia Airlines, AirAsia, Malindo Air and Firefly.
(4) "Accept AirAsia credit instead of asking for refunds, urges Tony Fernandes", The Star, 12 April 2020.
(5) Further information is available here.
