MyCC fines MAS, AirAsia for flouting Act

BT, September 10, 2013

Malaysian Airline System Bhd (MAS) and AirAsia Bhd were each slapped with a RM10 million fine for infringing the Competition Act 2010 during their 2011 short-lived tie-up.

The Malaysia Competition Commission (MyCC) said in its “proposed decision” yesterday the two carriers had collaborated to integrate some routes in which they had earlier competed for.

“When businesses agree to share markets, they are agreeing to stop competing at the expense of the consumers,” MyCC chairman Tan Sri Siti Norma Yaakob said in a statement yesterday.

The two dominant local airlines were the first two companies in Malaysia that were slapped with a fine from the competition regulator.

In response, MAS said it will submit its written representation and indicate whether it intends to make an oral representation to MyCC no later than October 18 2013.

“MAS is reviewing the proposed decision in consultation with legal counsel,” the airline said in a statement to Bursa Malaysia yesterday.

Meanwhile, low-cost carrier AirAsia said that it intends to vigorously defend the allegations that it has infringed section 4(2)(b) of the Competitions Act.

“We will review the matter with our counsel and reply to MyCC with our defence within the specified period,” the carrier said in a statement yesterday.

According to MyCC, MAS and AirAsia have “infringed section 4(2)(b) of the Competition Act by entering into an agreement that has as its objective the sharing of markets in the air transport services sector within Malaysia provided by both airlines”.

MyCC said the financial penalties imposed were based on the basis of turnover earned between January 1 2012 and April 30 2012 from the routes: KL-Kuching, KL-Kota Kinabalu, KLSandakan, and KL-Sibu.

The competition regulator added that these financial penalties are less than 10 per cent of the airlines’ respective worldwide turnovers between January and April 2012.

MAS and AirAsia have 30 days from the date of the proposed decision to submit written representations or indicate whether either one or both wishes to make oral representations before the MyCC.