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Malaysian Government Investigates MYAirline Chaos

New details emerge after the carrier suspended operations this month.

A MyAirline Airbus aircraft (Photo: MyAirline)

Malaysia’s MYAirline saga has no end in sight. The Transport Ministry is investigating the decision to grant the company an Air Service License (ASL) in 2022. But the chaos is far from over. Goh Hwan Hwa, the co-founder of the airline, was arrested and accused of money laundering. According to New Strait Times, Goh has been “on the authorities’ radar for the past two years for alleged dubious activities.”

“This is definitely something that Mavcom (Malaysia Aviation Commission) has to be answerable. They have to be accountable in terms of the process of granting the license (ASL),” Anthony Loke, Malaysia’s Transport Minister, said.

Mavcom was criticized for granting the Air Service License without scrutinization, mentioning it will cooperate in the Ministry of Transport’s investigation. Earlier, Loke said Mavcom was caught completely off guard.

The low-cost carrier launched its services in December 2022, operating domestic routes and to Bangkok with nine leased Airbus A320 airplanes.

The closure of the new airline is familiar in Malaysia. Rayani Air, a well-known Islamic airline, ceased operation after six months of launching in 2016.

MYAirline abruptly ceased flight services on the early morning of October 12, only 45 minutes before its first flight departure of the day. Hundreds of passengers were left stranded at Kuala Lumpur International Airport. The decision came after the airline failed to secure a new investor on October 11. The airline was accused of not providing a contingency plan to resolve a financial crisis.

The government did not sound the alarm, even the airline failed to pay its employees’ salaries and the airport’s aeronautical fees on time. Ironically, the Civil Aviation Authority of Malaysia (CAAM) has extended its Air Operator Certificate (AOC) by two years only three days before the suspension. But the AOC is now revoked for 90 days after the chaos.

The Resumption Remains Uncertain

As a result of the suspension, the tourism industry in Sabah, Eastern Malaysia is facing a huge impact and losing around 6,000 flights per week. Sabah is demanding for more direct flights to its tourist hotspots, such as Kota Kinabalu.

According to the airline, no staff “is placed on unpaid leave or been terminated to date.” MYAirline said that it will prioritize statutory payments and staff salaries. The staff were left behind, as the salaries for September were unpaid. On the other hand, unused tickets could be refunded by the end of this year. The incident has affected 125,000 passengers, and the unused tickets refund could reach RM 22 million ($4.6 million).

The stiff competition in the country put a strain on the startup. MYAirline believes that the tickets’ low price resulted in the financial circumstances. MYAirline held only 10% of domestic market share when it shut down.

Datuk Seri Azharuddin Abdul Rahman, interim accountable executive, revealed that the airline has received interest for a strategic partnership and has submitted an application to extend its ASL.

However, the cash-strapped airline is facing another challenge. The aircraft lessors consider recalling the airline’s aircraft following the incident. AirAsia could potentially enhance its fleet by leasing six of MYAirline’s aircraft.

“In regards to the aircraft lessors, we are in talks with them to retain our aircraft.” Azharuddin said.

Pete Ainsley

Author

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