THERE needs to be a fairer compensation scheme compared with the 0.5% proposed debt settlement by AirAsia X (AAX) for consumers and agents.
Under the proposed scheme which is now under the supervision of the High Court, travel agents, charter agents and passengers will receive RM3 mil out of the RM599.8 mil outstanding accrued liabilities, said the Malaysian Association of Tour and Travel Agents (MATTA).
The proposed debt restructuring requires the approval of at least 75% of the total debt value that votes in each class of creditors, and failure to get creditors’ approval for its business restructuring will likely see the carrier going into liquidation, noted MATTA president Datuk Tan Kok Liang.
Under its debt restructuring plan, the airline is aiming to reconstitute RM63.5 bil of its debt into an acknowledgement of indebtedness for a principal amount of up to RM200 mil 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 penalised as in the first place these deposits should be held in trust by the airline,” Tan noted.
“As such, we urge a better compromise which includes a full debt settlement rate or converting all outstanding liabilities into future credit points.”
The Court-convened meetings for Class A, B and C creditors to participate, speak and vote is tentatively scheduled on Nov 12, 2021.
“MATTA had on April 14, 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-19 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.
“The travel agent is not the principal – in this case, it is Air Asia X – but we have always been at the receiving end.”
According to Tan, MATTA had, on March 12, 2020 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, Tan added.
“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,” Tan remarked. – Nov 10, 2021
