MAVCOM proposes to impose time frame for airlines to pay aeronautical charges
20 October 2021
The Malaysian Aviation Commission (“Commission”) has issued a Consultation Paper on the Proposed Amendments to the Malaysian Aviation Commission (Aviation Services Charges) Regulations 2006 (“Proposed Amendments”).
The Proposed Amendments are intended to provide power to MAVCOM or an aerodrome operator to refuse to permit an aircraft to depart from the airport and further provide power specifically to the aerodrome operator to exercise a lien over the aircraft until the aeronautical charges due have been paid by the airlines.
The details of the Proposed Amendments are set out below.
||Description and Rationale
||Amendments to Regulations 2 and 3 – Application of the ASC Regulations.
||Existing wording: “These Regulations shall apply to an aerodrome operator”.
Proposed Amendments: Regulation 2 will be amended to include “airlines” and Regulation 3 will be amended by introducing a definition of “airline”.
Comment: These amendments are significant as they will extend the application of the Regulations to airlines.
||Insertion of a new Regulation – Arrangements for payment of charges.
||Proposed Amendments: Unless there is a prior arrangement with the Commission or the airport operator, all charges under the ASC Regulations shall be paid within 30 days of demand by the airline prior to departure from the airport of landing in Malaysia.
In the event of failure to adhere to the above, the Commission or the airport operator would be empowered to refuse to permit the departure of an aircraft until all dues are paid.
All charges due under the ASC Regulations which remain unpaid beyond the 30 days period shall also accrue an interest of one per centum per month.
Any person that contravenes this Regulation shall be liable to a fine not exceeding RM500,000.00 or to imprisonment for a term not exceeding five years or both.
Comment: These amendments are most welcome as they ensure prompt payment of aeronautical charges by airlines.
This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact email@example.com.
The rationale of the Proposed Amendments is to deter the delay and/or default in payment of the aeronautical charges by the airlines and to prevent the accumulation of the outstanding amounts. The Commission is also empowering the aerodrome operators, who are the parties responsible in collecting the charges, to take steps to recover any outstanding charges, which would in turn ensure the smooth running of aerodrome operations.
Feedback on the Proposed Amendments are to be submitted to the Commission before 27 October 2021
Alert prepared by Shannon Rajan (Partner) of the Aviation Practice of Skrine.