Malaysian Aviation Commission 2016 Annual Report Table of Contents 2 4 5 6 Key Milestones Who We Are What We Do Our Mission for MAVCOM and Values 7 8 12 17 Our Logo Message from Commissioners Committees our Executive Chairman 19 22 32 55 Senior Review of Financial Index Management Operations by Chief Statements Operating Officer SNAPSHOT OF THE MALAYSIAN CIVIL AVIATION INDUSTRY MAHB, Senai Airport, Airports Council International (ACI), International Monetary Fund (IMF) Malaysia’s air cargo tonnage growth has a strong relationship with Malaysia’s total trade value growth. SNAPSHOT OF THE MALAYSIAN CIVIL AVIATION INDUSTRY Map of Civil Aerodromes and Passenger Numbers in Malaysia, in 2016 1 6 6 2 15 2 1 6 13 14 16 2 12 7 3 11 8 5 7 1 3 10 9 17 4 4 3 12 5 8 4 5 11 10 9 International Domestic STOLport 1. Langkawi: 2.6 Mil passengers 1. Alor Setar: 787,706 passengers 1. Pangkor: 100,000 passengers 2. Penang: 6.6 Mil passengers 2. Kota Bharu: 2.0 Mil passengers 2. Redang: 420,000 passengers 3. Kuala Lumpur: 52.6 Mil passengers 3. Ipoh: 296,696 passengers 3. Tioman: 100,000 passengers 4. Johor Bahru: 3.5 Mil passengers 4. Subang: 2.8 Mil passengers 4. Tanjung Manis 5. Kuching: 4.9 Mil passengers 5. Melaka: 58,703 passengers 5. Mukah 6. Kota Kinabalu: 7.2 Mil passengers 6. Kuala Terengganu: 900,218 passengers 6. Kudat 7. Kerteh: 200,000 passengers 7. Semporna 8. Kuantan: 247,757 passengers 8. Marudi 9. Sibu: 1.4 Mil passengers 9. Long Akah 10. Bintulu: 805,206 passengers 10. Belaga 11. Miri: 2.2 Mil passengers 11. Kapit 12. Mulu: 60,074 passengers 12. Lawas, Long Pasia, Long Samado, 13. Limbang: 55,437 passengers Long Seridan, Ba’kelalan, Bario, 14. Labuan: 595,290 passengers Long Banga, Long Lellang 15. Sandakan: 882,811 passengers 16. Lahad Datu: 140,077 passengers 17. Tawau: 1.2 Mil passengers Source: Malaysia Airports Holdings Bhd. (MAHB), Senai Airport Terminal Services Sdn. Bhd. (Senai Airport), Sanzbury Stead Sdn. Bhd. (Sanzbury Stead) Note: STOLport stands for Short Take-Off and Landing airports Malaysia’s connectivity Malaysia’s Connectivity - International Destinations in 2016 Connected to Malaysia, as at 31 December 2016 North Asia, 33 Middle East, 18 Europe, 4 Number of Average Destinations Frequency/Day Southeast Asia, 76 Domestic x 34 x 382 Africa, 3 Australasia, 8 South Asia, 16 International x 112 x 409 Source: MAVCOM Analysis, AirportIS Source: AirportIS Malaysia’s Propensity to Fly 1.15 Singapore 1.10 Brunei 1.05 Malaysia 1.00 Thailand 0.95 0.90 Trips per Capita (logarithmic scale) Trips 0.85 Myanmar 0.80 0 1000 2000 3000 4000 5000 6000 GDP Per Capita (Current USD,2015) Source: MAVCOM Analysis, AirportIS, World Bank SP) t (A 8 Helicopter operators mi er proval) grante P l Ap d e na Helicopter & fixed wing ic io en v it g Lic ce (GH 16 3 aircraft operators r nd lin L) e o nd S a r (C H ence (A i d Lic SL) Fixed wing A P n ice 4 S u rv aircraft operators A o e Oper r S me ato G r ro r L i d ic A ro e 1 Balloon operator e n A c e ( A Number of O L Licence ) 3 Holders 9 8 4 Source: MAVCOM Analysis Total Foreign Airlines (Scheduled Services), as at 31 December 2016 Total Foreign Airlines 78 Source: MAVCOM Analysis Malaysia’s Passenger Traffic, 2010-2016 of 7.7% of 7.5% (I AGR (Do GR nter r C m CA na a es r tio Ye tic ea n 6- ) Y a 6- l) 2016 2015 2014 2013 2012 2011 2010 2016 2015 2014 2013 2012 2011 2010 l l 31.0 Mi 28.0 Mi 34.4 Mil 30.8 Mil 35.7 Mil 32.7 Mil 43.0 Mil 38.3 Mil 45.2 Mil 40.3 Mil 46.0 Mil 40.2 Mil 47.9 Mil 43.6 Mil Source: MAHB, Senai Airport Note: CAGR stands for Compound Annual Growth Rate Passenger Traffic vs. Compound Annual Growth Rate (CAGR) Growth (Percentage), 2010-2016 14.5% 121.7 13.0% 7.6% CAGR 98.7 9.16 Passenger Traffic 5.6% 16.1% 58.7 7.3% Passenger Traffic (Mil) Passenger Traffic 41.2 34.2 18.7% 12.6% 12.7% -0.2% 5 6.7 1.8 0.9 Malaysia Thailand Vietnam Philippines Indonesia Cambodia Myanmar Laos Brunei Singapore Source: MAHB, Senai Airport, AirportIS Industry Available Seat Kilometer (ASK), Revenue and Average Fares Revenue Passenger Kilometer (RPK), of Malaysian Carriers, 2010-2016 2010-2016 538 532 510 510 533 485 436 76.2 77.5 77.9 64.0 60.8 74.9 79.4 23.0 23.0 21.7 20.9 RPK 20.1 20.1 157.8 18.0 139.4 and 113.8 119.6 ASK Load Factors 96.7 94.3 87.5 96.0 95.0 89.2 85.3 74.9 73.5 66.7 2010 2011 2012 2013 2014 2015 2016 Revenue (RM Mil) Fares (RM) 2010 2011 2012 2013 2014 2015 2016 Source: MAVCOM Analysis, AirportIS Note: Revenue of Malaysian carriers had grown at CAGR of 2.5 per cent, but RPK (Mil) ASK (Mil) Load Factors at the same time average fares had declined 3.4 per cent over the same period. Source: MAVCOM Analysis Malaysian carriers refer to all Air Service Licence (ASL) holders that operate scheduled passenger services. Domestic vs. International Average Fares, Global Average Jet Fuel Price, 2010-2016 2010-2016 126 128 123 987 900 113 984 819 739 357 90 348 674 652 316 313 311 64 294 USD/bbl 52 264 2010 2011 2012 2013 2014 2015 2016 Domestic (RM) International (RM) Source: MAVCOM Analysis, AirportIS 2010 2011 2012 2013 2014 2015 2016 Note: International fares had fallen by 6.6 per cent CAGR compared with domestic fares of only 1.8 per cent CAGR. However, domestic fares had been more volatile compared with international fares. Source: MAVCOM Analysis, Thomson Reuters Blended Revenue Per Available Seat Malaysia Air Cargo Growth, Kilometer (RASK) vs. Cost Per Available 2010-2016 Seat Kilometer (CASK) of Malaysian Carriers, 2010-2016 2014 25 9.7 2013 21 21 2012 2.0 2015 2011 19 19 -1.0 -2.6 18 -1.3 17 17 17 17 sen 17 16 15 15 2016 -9.2 2010 2011 2012 2013 2014 2015 2016 Source: MAHB, Senai Airport, Airports Council International (ACI), RASK CASK International Monetary Fund (IMF) Note: Malaysia’s air cargo tonnage growth has a strong relationship with Source: MAVCOM Analysis Malaysia’s total trade value growth. 02 03 KEY MILESTONES FOR MAVCOM As at 31 December 2016, the Commission: Received 1,428 complaints Successfully managed and resolved 90 per cent of these complaints 75 per cent of the decision supported the consumers 1 March 2016 Malaysian Aviation 18 July 2016 Commission Act 2015 Launched the Malaysian [Act 771] came into effect 5 May 2016 Aviation Consumer and MAVCOM was Launched the Complaints 13 June 2016 Protection Code 2016 formally established. Management System Revoked Rayani Air’s Air (MACPC) which includes 26 August 2016 20 December 2016 (CMS), an online Service Licence (ASL). minimum service levels Advised Rayani Air’s Revoked Eaglexpress’ YBhg. General Tan Sri complaints channel for and standards for aviation customers to seek 11 October 2016 Air Service Permit (ASP) Dato’ Sri Abdullah bin aviation consumers, service providers and possible chargeback on Introduced the ‘Know for not meeting the Ahmad RMAF (Retd.) made available on the ensures that consumer their credit or debit cards Your Rights Before You specific conditions appointed as Executive MAVCOM website rights are protected under upon the suspension of Fly’ video on MAVCOM’s imposed by the Chairman. www.mavcom.my. the national law. Rayani Air’s ASL. website. Commission. 25 April 2016 9 May 2016 1 July 2016 25 July 2016 1 September 2016 31 October 2016 Commenced a Conducted a consumer The Malaysian Aviation Launched an Granted an ASL to Announced the revision Moratorium on new survey to ascertain the Commission (Aviation investigation on Suasa Malindo Airways. to Passenger Service applications for Ground level of consumer Services Charges) Airlines and lodged a Charges (PSC). Handling Licences (GHL). awareness on passenger Regulations 2016 came police report against 17 September 2016 rights and general level of into effect. Monspace Sky Airlines. Granted an ASL to satisfaction towards Firefly. aviation services provided in Malaysia. 1 October 2016 Granted an ASL to AirAsia, AirAsia X and MASwings. As at 31 December 2016, the Commission has approved a total of: 5 Air Service Licences (two were attached with additional financial improvement conditions) 14 Air Service Permits (four were attached with additional financial improvement conditions) 1 Ground Handling Licence 1 Aerodrome Operator Licence 74 International Air Traffic Rights to Malaysian-designated airlines 30 Domestic Air Traffic Rights to Malaysian-designated airlines 04 WHO WE ARE The Malaysian Aviation Commission (MAVCOM or Commission) is an independent body set up under the Malaysian Aviation Commission Act 2015 [Act 771]. After MAVCOM’s establishment on 1 March 2016, the economic regulation of Malaysia’s civil aviation industry and consumer protection of air travellers fall under the Commission’s jurisdiction. Prior to the establishment of MAVCOM, economic regulation was managed by the Ministry of Transport Malaysia (MoT) and Department of Civil Aviation Malaysia (DCA). Through Act 771, the Commission is empowered to make its own independent decisions. It also acts as an independent adviser to the MoT on economic matters pertaining to civil aviation.