28-8-2024 (KUALA LUMPUR) Malaysia’s civil aviation regulator has taken decisive action against the national carrier, Malaysia Airlines, by reducing the duration of its air operator certificate from three years to one year. This development, announced by Transport Minister Anthony Loke on Wednesday, follows a comprehensive investigation into technical issues plaguing the state-owned airline.
The probe, conducted by Malaysia’s Civil Aviation Authority in June, uncovered several significant safety and maintenance concerns. Minister Loke revealed during a press conference that these issues included a critical shortage of skilled workers and mechanical components, raising alarm bells about the airline’s operational capabilities.
In response to these findings, Malaysia Airlines has formulated a mitigation plan. The strategy includes an aggressive labour recruitment programme aimed at addressing the skills shortage. Additionally, the airline plans to scale back its third-party maintenance, repair, and operations services to concentrate more resources on its own fleet.
“To ensure compliance with the mitigation plan, Malaysia Airlines has been directed to present a monthly report on the status of the plan,” Loke stated. He further added that regulators would conduct an annual audit as a prerequisite for the renewal of the air operator certificate.
This regulatory action comes on the heels of an announcement by Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, that it would temporarily reduce flights and routes across its carriers until December 2023. The decision was prompted by recent service disruptions earlier this month, highlighting the operational challenges facing the airline.
The current situation is another setback for Malaysia Airlines, which has grappled with difficulties over the past decade, including two fatal aviation disasters in 2014. Following these incidents, the airline was delisted, and Malaysian Airline System (MAS) underwent restructuring to form MAG under the sovereign wealth fund Khazanah Nasional.
Despite these challenges, MAG reported a net profit of 766 million ringgit ($176.4 million) for 2023, marking its first profitable year since its formation in 2015 and the first profit since MAS’s last positive financial result in 2010.
The impact of the planned flight reductions is already becoming apparent. Aeroroutes, a website tracking airline schedule changes, reported 31 weekly flights cut across 13 of MAG’s international routes for the week beginning 25 August.
Minister Loke acknowledged that these reductions would likely affect MAG’s revenue, though he assured that the company’s financials “are still in a good position right now”. The question of whether further financial support will be required remains open, with the minister stating that such decisions would depend on MAG’s sole shareholder, Khazanah.
MAG, which also operates the carrier Firefly and Muslim pilgrimage service provider Amal, has committed to addressing the issues that led to its operational difficulties. These include supply chain problems, technical constraints, manpower shortages, and other post-pandemic challenges.
The group has also cited delayed deliveries of new aircraft as a factor contributing to its reduced operational capacity. Currently, the MAG group operates a fleet of just over 100 aircraft, according to company and industry data.
