All you need to know about: Mavcom’s dissolution and merger with CAAM

On Monday, June 24, 2024, Putrajaya tabled two Bills to dissolve the Malaysian Aviation Commission (Mavcom) and fold its functions into Civil Aviation Authority of Malaysia (CAAM).

What will happen next?

• This is a culmination of a proposal made by Transport Minister Anthony Loke when he first held the same position in the Mahathir administration back in 2018.
• With this move, CAAM will be the sole regulatory body of the civil aviation industry in Malaysia.
• Mavcom staff will be transferred to CAAM in the next few months.

Why is this move important? According to Malay Mail senior reporter Soo Wern Jun who covered the tabling in Parliament:

• Currently, Malaysia is one of the few countries with two aviation regulators — Mavcom and CAAM.
• Apart from streamlining Malaysia’s aviation oversight, the merger between Mavcom and CAAM is aimed at reducing red tape and improving the aviation service delivery especially in licensing. All Malaysian airlines are required to have both the air service licence (ASL) and air operator certificate (AOC) — the ASL is issued by Mavcom, but the AOC is granted by CAAM.
• The merger will also empower CAAM financially as the sole regulator. In 2019, Malaysia’s aviation safety rating was downgraded to Category 2 by the United States Federal Aviation Administration. While it has since returned to Category 1 in 2022, among the reasons why it was initially downgraded was due to CAAM’s lack of financial capability and could not hire the best qualified technical personnel. Once the merger kicks off, CAAM will be given more power in terms of setting fees, and in the long run, they will have financial independence to make better hires.

A general view of Kuala Lumpur International Airport 2 in Sepang May 22, 2024. — Picture by Shafwan Zaidon

What you need to know about Mavcom:

• Established via the Mavcom Act 2015 in March 1, 2016 — under the Najib administration.
• Before Mavcom, aviation regulatory functions were primarily handled by the Department of Civil Aviation (DCA), which focused mainly on safety and technical regulations.
• The establishment of Mavcom separated economic and commercial regulatory functions from technical and safety oversight — which remains under the purview of DCA's successor, the CAAM.

Mavcom’s functions included:

• Regulating economic matters related to civil aviation and overseeing allocation of air traffic rights or slot coordination at airports
• Protecting the rights and interests of consumers and addressing consumer complaints
• Granting, renewing, suspending, and revoking licences for air transport services
• Promoting competition and preventing anti-competitive practices, while ensuring fair market conditions and preventing abuse of market power
• Resolving disputes between consumers and service providers
• Regulating tariffs and charges, including passenger service charges (PSC) and other fees

Here's a chart provided by Mavcom to explain the different jurisdictions of the regulators and their relationship with the Ministry of Transport (MoT).

(From left) Deputy Transport Minister Datuk Kamarudin Jaffar, Mavcom executive chairman Nungsari Ahmad Radhi, Transport Minister Anthony Loke and Transport Secretary-General Datuk Seri Saripuddin Kasim are seen during a press conference in Putrajaya in this file photo taken on July 20, 2018. — Picture by Zuraneeza Zulkifli

This proposal to merge Mavcom and CAAM went back as far as 2019, when Loke was transport minister under prime minsister Tun Dr Mahathir Mohamad, but Putrajaya went quiet with it until Loke was again heading the ministry:

• July 2018 — Tan Sri Gen (Rtd) Abdullah Ahmad stepped down as Mavcom chairman after it was revealed that he earned RM85,000 a month — four times what then prime minister Dr Mahathir was earning
• February 2019 — News publications started reporting on rumours of Mavcom's disbandment following the disbandment of the Land Public Transport Commission (SPAD) in May 2018
• December 11, 2019 — Cabinet meeting agreed that the regulatory body of the Malaysian aviation industry be rationalised and placed under one entity
• December 12, 2019 — MoT announced its plan to disband Mavcom
• November 2020 — After taking over Putrajaya, the Perikatan Nasional administration vowed it would continue with the disbandment plan
• October 2023 — Back as transport minister, Loke first announced that the Anwar administration would table the Bills to dissolve Mavcom
• June 24, 2024 — The two Bills were tabled by Deputy Transport Minister Datuk Hasbi Habibollah in the Dewan Rakyat

According to its former executive chairman Nungsari Ahmad Radhi, the reason why it has taken so long for these Bills to be re-introduced was down to the Covid-19 pandemic.

Here are some other things which also happened in Parliament yesterday (June 24, 2024):

• Perikatan Nasional’s Tasek Gelugor MP Datuk Wan Saiful Wan Jan was referred to the Rights and Privileges Committee for claiming that a government representative had offered for his court case to be dropped. In response, Opposition MPs staged a walkout mid-session.
• Finance Minister II Datuk Seri Amir Hamzah Azizan said Putrajaya is confident of achieving its official inflation rate and economic growth forecasts for 2024 despite the diesel subsidy retargeting programme.
• Deputy Communications Minister Teo Nie Ching said the Malaysian Communications and Multimedia Commission (MCMC) has blocked 549 pornographic and 69 sex work websites since January this year. It has also removed 308 pornographic items and 838 sex work-related contents from various social media platforms.
• De facto law minister Datuk Seri Azalina Othman Said revealed that the masterminds and "traitors" among Malaysians who are supporting and helping the Sulu group in making claims over Sabah are being identified
• Deputy Health Minister Lukanisman Awang Sauni said contract pharmacists in the Ministry of Health will be appointed permanently to their positions without going through a re-hiring process.