According to the Malaysian Aviation Commission (MAVCOM), the COVID-19 pandemic constitutes 'extraordinary circumstances' under the Malaysian Aviation Consumer Protection Code. As a result, MAVCOM is temporarily providing some leeway in terms of how airlines can respond to passenger refund requests. However, in doing so, it may have inadvertently exposed passengers to the risk of losing their entire ticket cost.
The Malaysian Aviation Commission (MAVCOM) recently reported a bleak outlook in 2020 for the Malaysian aviation services market due to the COVID-19 pandemic. MAVCOM foresees that the significant decline in tourist arrivals and receipts, passenger traffic and revenue due to lower air travel demand could be made worse if the pandemic proves hard to contain, leading to prolonged travel restrictions. This article outlines government initiatives to support the aviation industry.
The COVID-19 pandemic's impact on the Malaysian economy during this period of uncertainty and crisis depends on national-level efforts to contain the virus. Until then, the global restrictions imposed on travel will continue to severely undermine the aviation industry, possibly to the extent of necessitating government intervention in the market. It would be prudent for the government to consider the Malaysian Aviation Commission's position when conducting any cost-benefit analysis of measures or aid.
The Malaysian Aviation Commission (MAVCOM) recently announced that it had imposed RM2 million fines on AirAsia Berhad and its long-haul sister airline AirAsia X Berhad. MAVCOM further announced that it had imposed an RM856,875 penalty on Malaysia Airports (Sepang) Sdn Bhd, which is the operator of Kuala Lumpur International Airport. The fines come at a time of considerable uncertainty for MAVCOM and the Malaysian aviation industry.
Malaysia's International Aviation Safety Assessment air safety rating was recently downgraded from Category 1 to Category 2 by the US Federal Aviation Administration (FAA). As a result, all Malaysian airlines are now restricted from adding new flights to the United States, although existing flights will be allowed to continue under heightened FAA surveillance and checks. The downgrade also means that reciprocal code-sharing arrangements between US and Malaysian airlines are no longer permitted.
Following the prime minister's announcement on 1 May 2020 regarding the reopening of the economy, the construction industry is permitted to operate with effect from 4 May 2020. Such operations will be subject to compliance with the standard operating procedure for construction issued by the Ministry of Works.
As Malaysia transitions into the third phase of the Movement Control Order (MCO Phase 3), the government has moved to allow additional economic sectors to operate during this period. This includes construction projects and services related to construction works. However, construction industry players that intend to resume operations during MCO Phase 3 should take note that they must comply with the third set of frequently asked questions issued by the Ministry of International Trade and Industry.
In relation to the Movement Control Order (MCO) regarding COVID-19, the Ministry of Works, among others, issued a series of frequently asked questions to clarify some of the issues affecting the construction industry. The Ministry of Works has since confirmed that all works at construction sites are not permitted under the MCO and must therefore be stopped during the relevant period, except for 'critical works'.
In its effort to contain the COVID-19 outbreak, the government has implemented the Movement Control Order (MCO) throughout Malaysia. The MCO has affected the performance of non-essential works, including works at project and construction sites where workers are required to stop work. Questions remain, including does the COVID-19 outbreak or the MCO constitute a force majeure event? And how does the outbreak or the MCO affect parties' rights and obligations in terms of timing and costs?
Retention sums are usually provided in construction contracts to be withheld by the employer from the sum otherwise certifiable to the contractor. This serves to safeguard employers against possible defects or non-completion of works on the part of contractors. The Federal Court recently decided whether retention sums under a construction contract are held on trust by the employer for the benefit of the contractor.