Kuala Lumpur 10 November 2021: The Malaysian Association of Tour and Travel Agents (MATTA) says that a fairer compensation scheme is much needed compared with the 0.5 percent proposed debt settlement by Air Asia X. Under the proposed scheme which is now under the supervision of the High Court, travel agents, charter agents, and passengers will receive RM3.0 million out of the RM599.8 million outstanding accrued liabilities.
The proposed debt restructuring requires the approval of at least 75% of the total debt value that votes in each class of creditors. Failure to get creditors’ approval for its business restructuring will likely see the carrier going into liquidation.
Under its debt restructuring plan, the carrier is aiming to reconstitute RM63.5 billion of its debt into an acknowledgment of indebtedness for a principal amount of up to RM200 million by shaving off 99.9% of its issued share capital as well as a proposed share consolidation of every 10 existing shares in AAX into one share.
Passengers and travel agents should not be penalized as in the first place these deposits should be held in trust by the airline. As such we urge a better compromise with includes a full debt settlement rate or converting all outstanding liabilities into future credit points.
The Court Convened Meeting for the Class A, B, and C creditors to participate, speak and vote is tentatively scheduled on the 12 November 2021.
MATTA had on 14 April 2020 called on the Malaysian Aviation Commission (MAVCOM) to provide a mechanism for the protection of consumers including travel agents through adequate supervision and governance. If MAVCOM is unable to protect air passengers' interests, who will? We need to restore customer confidence post-COVID travel.
It is also for the Consumer Tribunal of Malaysia to note and be aware of the situation and the circumstances that the Travel Agents are facing due to this situation. While the Travel Agent is not the principal, in this case, it is Air Asia X, but we have always been at the receiving end.
MATTA on 12 March 2020 had also urged the Ministry of Tourism, Arts and Culture (MOTAC) to have the Fourth Schedule of the Tourism Act 1992 amended or revoked. The schedule in its current form does not take into account the changing landscape of the tourism economy and put both travel agents and operators as well as their customers in a difficult position.
The COVID-19 pandemic further exposed the fundamental flaws of the schedule. Despite numerous engagements with MOTAC over the last 15 years, the government has yet to take the necessary steps in properly addressing the issue.
“MATTA reiterates its stand to urge the government to seriously support the local aviation industry to survive this period as airlines are crucial to the recovery of the travel and tourism industry and would like to extend our help to be part of any committee in drafting policies for the betterment of the industry“, concluded Tan.
DATUK TAN KOK LIANG PGDK, M.A Tourism, CA (M), FCTIM, CHA
Term 2021 – 2023