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Passenger Rights come to Asia: an overview of the Malaysian Aviation Consumer Protection Code 2015

Clyde & Co LLP

Malaysia March 3 2017

The Malaysian Aviation Commission (“the Commission”), an independent adviser to the Malaysian Ministry of Transport, recently established the Malaysian Aviation Consumer Protection Code 2015 (“the Code”) to protect passengers’ rights in Malaysia. The Code came into operation on 1 July 2016 and affects all air carriers operating domestically, and all international carriers flying into or out of Malaysia. Its provisions are mandatory.

A first in Malaysia’s aviation industry, the Code sets out minimum service standards of performance for air carriers and imposes obligations on air carriers to inform passengers of their rights. The Code also provides for passengers’ basic rights of recourse against air carriers which breach the Code. The Code is adapted (sometimes word for word) from international laws and regulations such as the Montreal Convention 1999 (“MC99”), Regulation (EC) No 261/2004 (“EC261”) and relevant publications produced by the International Civil Aviation Organisation (“ICAO”).

As an overarching obligation, air carriers are to “make efforts” to raise awareness of passengers’ rights as reflected in the Code, as well as the relevant complaint procedures (paragraph 19 of the Code). This includes a requirement to prominently publish minimum service levels and standards of performance in the General Conditions of Carriage (“GCC”), and display signage at airport counters to highlight this information.

Key provisions of the Code

Part II: Minimum Service Level and Standard of Performance for Air carriers and Aerodrome Operators

As a basic requirement, the provisions of the GCC must be clearly disclosed to passengers before the time of purchase of the ticket (subparagraph 7(1) of the Code). This may be done through the incorporation of the GCC by reference on the ticket or boarding pass. As a matter of good practice, air carriers should ensure that their GCCs are published prominently on their respective websites. 

The Code specifically provides for passengers with disabilities (paragraph 9 of the Code). The Code draws its definition of disability from the definition developed by ICAO. In particular, air carriers are to make all reasonable efforts to provide assistance to disabled passengers, and guidelines are set out to ensure such assistance. The Code also sets out the requisite compensation levels for disabled passengers whose mobility equipment and/or assistive devices are lost or damaged while being handled by the air carrier (paragraph 14 of the Code).

Air carriers should ensure that their employees undergo relevant training on a regular basis (subparagraph 9(17) of the Code). This requirement summarises the more detailed guidelines reflected in Chapter 2 of ICAO Doc 9984. Given the specific provisions imposed on the carriage of persons with disabilities, air carriers should conduct a review of their GCC to ensure that all requisite provisions are incorporated.

Part III: Passenger’s Rights

Liability for lost, damaged or delayed baggage is set out in paragraph 13 of the Code. The language used and the maximum liability limit of SDR1,131 have been taken from the relevant MC99 provisions. Paragraph 13(7) of the Code also reflects similar time frames for passengers to submit their complaints to an air carrier. 

Air carrier liability for flight delay and/or cancellation is set out in paragraph 12 of the Code. This paragraph draws from the relevant provisions in MC99 as well as EC261. In particular, the separate exoneration defences used in MC99 and EC261 have both been incorporated into the Code and whilst the scope of the EC261 defence has been severely eroded over the last few years, it remains to be seen what effect case law will have on the defence in the Code. For ease of comparison, a table setting out various provisions is provided (below):

Click here to view the table.

Part IV: Consumer Complaints 

Part IV of the Code sets out mechanisms for the submission of consumer complaints. In particular, paragraph 17 provides for direct passenger complaints to air carriers. Air carriers must acknowledge each complaint within 24 hours of receipt. Air carriers must also “send a substantive written response to the complainant and provide a resolution to the complaint within 30 days from the receipt of the complaint”. In order to ensure compliance with paragraph 17, air carriers should ensure that a mechanism is put in place for automatic responses to be sent acknowledging passengers’ complaint submissions. A calendar system should also be put in place to ensure that substantive responses are sent to passengers within 30 days.

Paragraph 18 provides for the submission of complaints to the Commission, following a failure of an air carrier to provide a solution acceptable to the passenger. If the Commission accepts the passenger’s complaint, it will forward this complaint to the responsible air carrier and the air carrier will have a further 30 days from the receipt of the complaint to resolve it. Passengers have up to a year from the date of the incident giving rise to the complaint to submit such a complaint to the Commission (paragraph 18(2)). 

It should be noted that air carriers which fail to comply with the Code will be subject to a financial penalty of not more than MYR200,000 (approx. USD44,700) (paragraph 22). Any subsequent non-compliance will be subject to a penalty of up to ten times the amount of the original penalty. It is currently unclear whether air carriers will be able to appeal such decisions.

The interaction of the Code with existing domestic and international laws

In general, the Code is silent on its interaction with existing domestic and international aviation laws. On a preliminary analysis, these international conventions are considered exclusive in application and have been incorporated into Malaysian law through various legislative statutes governing domestic and international carriage. These conventions should therefore take precedence over the Code in any instance of conflict. However, the exclusivity of the conventions under Malaysian law may only be conclusively established if a claim is brought in a Malaysian Court regarding the application of the Code vis-à-vis the existing laws.

The Code also does not indicate or imply that it should take precedence over the air carriers’ GCC, or that it will render any inconsistent provision of the GCC invalid. In general, international conventions allow for freedom of contract between air carriers and their passengers, as long as the provisions of the GCC do not conflict with the conventions. While air carriers should ensure that the provisions of their respective GCC incorporate various provisions laid out in the Code, air carriers would likely have the freedom to include additional terms and conditions in the GCCs, in line with the general principles and provisions of the Code.

The Code in practice

The Code has only been in force for half a year and it is therefore difficult to draw any conclusions in terms of its effectiveness. However, the following observations have been made to date:

  1. Passengers sometimes file multiple claims with the Commission, leading to extra time and/or manpower being spent on a single claim; 
  2. Some claims which are clearly not compensable are revived by the Commission as passengers are afforded a second chance following a rejection of their claim;
  3. The Code indicates that air carriers should provide a “resolution” to passengers in respect of their claims. However, it is unclear what “resolution” refers to because in many instances passengers are not entitled to any or any significant compensation pursuant to the applicable laws.

Conclusion

It is too early to be definitive, but given the trend in many parts of the world towards increased consumer protection, it seems inevitable that the Commission’s powers will be enhanced and the penalties and burdens imposed on carriers, with ever decreasing abilities to defend their position, increased.

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