Yesterday, in the Dewan Rakyat, Deputy Transport Minister Ab Aziz Kaprawi said the Malaysian Aviation Commission (Mavcom) would be tasked with drafting proposals by June for airfares during festive seasons.
“The initial findings of the study showed that airfares went up by as much as 4.7-fold within two days of a festival,” Aziz told the Dewan Rakyat.
But former Malaysia Airlines CEO Abdul Aziz Rahman told FMT there was no necessity to fix ceiling prices.
“Airline fares are set based on the costs of a certain route and competition between airlines. Now, there is a lot of competition where domestic routes are concerned.
“The airlines themselves will look after the prices. The government shouldn’t interfere as they wouldn’t know an airline’s operating costs.”
Aziz, who was largely credited with Malaysia Airlines’ success in the 1980s, said the government should instead look at whether the airlines flying the domestic routes were conspiring to set fixed high prices.
“As far as possible, the government should leave it to the market to set prices. But if the government has evidence that airlines are forming a cartel, then it should act.”
Under the Competition Act 2010, anti-competitive practices such as collusion and cartel practices are illegal.
The Federation of Malaysian Consumer Associations (Fomca), meanwhile, said the setting of ceiling prices would ensure consumers are protected. However, it emphasised the need for this to be done correctly.
“What is important is that airlines don’t make excessive profits because they also need to remain commercially viable,” said Fomca CEO Paul Selvaraj.
Selvaraj said the government must make sure that no company seeks to make excessive profits, whether during festive seasons or otherwise.
Independent economist Hoo Ke Ping said government intervention was a must as there were too many unscrupulous businessmen who made excessive profits at the expense of consumers.
“My concern is whether Mavcom can strike the right balance in fixing ceiling prices.
“What is important is that whatever they do, it doesn’t end up hurting the airlines financially, because that could be worse.”
Price hikes during festive seasons: Mavcom to fix domestic airfares