Impact of the Malaysian Aviation Consumer Protection (Amendment) Code 2024 on airlines operating in Malaysia

On 28 August 2024, the Transport Minister of Malaysia, Anthony Loke announced that airlines operating in Malaysia will be required to offer customers the option of a refund of the original price of payment for flight delays of five hours or more. This new measure, along with other consumer protection measures, comes as a result of actions taken by the Malaysian Aviation Commission (“MAVCOM”) to enhance the Malaysian Aviation Consumer Protection Code 2016 (“MACPC 2016”).

Legislative amendments to the MACPC 2016, which have mostly taken effect from 1 September 2024, impose significant additional obligations on airlines operating in Malaysia and we set out below some key changes to the MACPC 2016 that airlines should take note of:

1. Full disclosure of airfare: Airlines must now publish all-inclusive prices at the time of advertising and before ticket purchase by the consumer. This consists of: (a) the base fare, including all charges payable to the airline; (b) any taxes and fees imposed by the Government; (c) any fees and charges prescribed under any written law; (d) fuel surcharge; and (e) such other fees and charges as determined by the Commission to be imposed on consumers by providers of air services. Advertisements of air fares must not be false, misleading or deceptive.
    
2. Full refund of airfare to be offered in the event of a delay of 5 hours or more: whereas airlines were previously required to offer hotel accommodation [1] and transport between the airport and place of accommodation, they are now required to offer consumers an additional option of a full refund of the ticket within 30 days of the date of claim for the refund.
   
   The refund is to include the base fare and a broad range of fees such as fuel surcharge and charges for optional services. Additionally, the refund must be in the same form as the original method of payment made by the consumer at the time of his or her ticket purchase.
    
3.  Full refund of airfare to be offered even if cancellation or delay is caused by extraordinary circumstances: airlines can no longer avoid paying compensation even if the flight was cancelled or delayed due to extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. [2] Instead, airlines must first offer a refund in the original method of payment but could, in addition, offer alternative forms of refunds such as travel vouchers or credits.
    
4. Removal of cancelled flights from all booking platforms immediately: Airlines are now required to immediately remove a flight that is no longer available from their online booking system and cease all booking or sale of that flight.
    
5. Denial of boarding only before the consumer boards the aircraft: Airlines can only deny boarding to consumers before they board the aircraft. Such denial must be done at the check-in counter or departure gate.
    
6. Extension of time for submission of complaint to the MAVCOM: the time limit for submitting a complaint to the MAVCOM is extended from 1 year to 2 years.
    
7. Restrictions to changing scheduled time of departure (with effect from 1 January 2025): Airlines are to notify consumers of any changes to the scheduled time of departure at least two weeks before actual departure unless they can prove that a further change to the scheduled time of departure is caused by extraordinary circumstances or technical reasons, which could not have been avoided even if all reasonable measures had been taken.

Under section 22 of the MACPC 2016, the MAVCOM may impose a financial penalty to any person for non-compliance with certain provisions of the MACPC, of an amount not exceeding 200,000 ringgit and in the case of a second or subsequent non-compliance, an amount ten times the financial penalty which was imposed for the first non-compliance.

As a result of these changes, we recommend airlines operating in and out of Malaysia take note of the additional consumer protection measures introduced by the amendments to the MACPC 2016 and ensure that their operations are compliant with these measures.

In addition, airlines should also review and update their conditions of carriage to ensure that they are not inconsistent with the provisions of the amended MACPC 2016.

Please refer to the MAVCOM’s Fact Sheet and FAQ on the MACPC 2016 amendments for more information. The Fact Sheet and FAQ can be found here and here respectively.

If you would like further information or legal advice on the above, please contact our aviation team who would be happy to assist.

1 Hotel accommodation is to be provided where (i) a stay of one or more nights becomes necessary or (ii) a stay additional to that intended by the passenger becomes necessary.

2 “Extraordinary circumstances” is defined as circumstances that may, in particular, occur in cases of war, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating airline.