Select Page

Selected Initiatives / MAVCOM’s Long Term Recommendations for the Malaysian Civil Aviation Industry (2021-2030) / Framework

The Framework

MAVCOM’s paper recommends that the plan is to be implemented over the long-term between 2021 and 2030. The years 2019 and 2020 are the foundation-setting years, where enabling measures—such as the establishment of new policies, accompanying strategies and plans, and other factors such as institutions and baselining—should be undertaken.The framework within the recommendation paper is illustrated in Figure 1 below:

click for more infoclick for more infoclick for more infoclick for more infoclick for more infoclick for more infoclick for more infoclick for more infoclick for more info

Source: MAVCOM

Vision and Objective

The overall vision as outlined in the recommendation paper is the development of an economically sustainable and resilient civil aviation sector that can significantly support Malaysia’s evolution into a top destination for global economic activity by 2030, in line with National Transport Policy Thrust 5 (“Expand global footprint and promote internationalisation of transport services”). Given the strong interlinkage between the contribution of tourism and trade to economic growth and air connectivity, the main conduit between the civil aviation sector and its role in Malaysia’s economic development is through air connectivity.  

While it is a necessary condition, a high-performing civil aviation sector is only one of the enablers for Malaysia to achieve its vision of becoming a developed economy, by transforming itself into a top destination for global economic activity. The aviation sector needs to be part of an efficient, effective, and sustainable multi-modal transportation and telecommunications network, which in turn are instrumental in Malaysia’s trajectory towards becoming a top destination for global tourism and trade. There is also a virtuous cycle at play—the growth of the aviation sector hinges on the performance of the tourism and trade sectors, from which the sector derives its demand in terms of passengers and cargo. Hence, manifesting the vision of the recommendations by the Commission requires meeting the strategic objective of maximising air connectivity in parallel with efforts to grow Malaysia’s economic base, particularly in terms of tourism and trade. 

Strategic Pillars

Maximising air connectivity requires commitment towards implementing three Strategic Pillars, which will be actualised through relevant action plans, outlined as part of the Commission’s recommendations:

 

  • The establishment and maintenance of a fair and competitive commercial environment

A high-performing civil aviation sector can only exist in a commercial environment that is fair and competitive. While “fairness” is multi-dimensional, MAVCOM has articulated that it applies fair competition principle in terms of economic regulation of the Malaysian civil aviation sector, which promotes equity or distributive justice as part of the overall objective of maximising consumer welfare, while also safeguarding the sector from anti-competitive practises. This principle is also expressed through effective consumer protection, as well as, appropriate public service obligations (PSOs).

 

  • The availability of appropriate airports infrastructure that is efficient and effective in terms of financial performance and service delivery

High levels of air connectivity are enabled by an optimal airport infrastructure, which is defined as one which meets the service level requirements of airport users, i.e. passengers and airlines, as well as, one which is financially sustainable. Airlines choose to fly into airports that provide a high degree of operational efficiency and service quality, which affect their own efficiency, pricing, and networks. Given the high capital and operational costs involved in developing and running airports, it is also imperative for airports to achieve the most optimal returns relative to their funding costs.

 

  • The establishment of a strong civil aviation-related human capital base to support the development of the sector

High air connectivity and an optimal airports infrastructure are only possible if it is supported by effective and efficient human capital, not only in terms of technical skills, but managerial and administrative as well.

Prerequisites

It should be emphasised that the successful implementation of the Strategic Pillars outlined above hinges on two factors: the existence of strong institutions and the establishment of a National Aviation Strategy (NAS or the Strategy).

A.      Strong institutions

The Government of Malaysia plays many overlapping and, at times, contradictory roles in relation to the Malaysian civil aviation sector. A critical factor for the successful implementation of MAVCOM’s recommendations, therefore, is a stronger delineation of these roles and responsibilities. This is aimed at eliminating conflicts of interest, in addition to providing consistency in policy aims and directions.

Moreover, the implementation of the MAVCOM’s recommendations requires a relatively high degree of coordination between ministries and agencies. Hence, the capacity of these institutions needs to be strengthened in terms of human capital, technical and operational efficiency, as well as, technological inputs. For instance, as the global aviation industry evolves, capacity is required to assess and prepare for increased liberalisation on one hand, and the game-changing impact of technologies, on the other.

B.       National Aviation Strategy (NAS)

Notwithstanding the establishment of the National Transport Policy, the implementation of the MAVCOM’s recommendations to the industry still requires the development of an NAS as its key enabling instrument. While the National Transport Policy includes measures related to the civil aviation sector, these measures are placed within the context of a multi-modal transportation framework and are not necessarily specific to the aviation sector. The terms of reference for an NAS should include the following:

  • Identification of clear objectives and priorities for the development of the civil aviation sector, with clear directions on the balance of priorities between economic, safety and security, environmental, and societal imperatives
  • Overarching policies on the economic management of the civil aviation sector, including but not limited to, liberalization, and ownership and management of transportation assets
  • Terms of reference for supplementary guidance for the sector, including legislation, regulations, and related plans and strategies.

download

download

download

download

download

download

download

download

download

download

download

Back Top Top