KUALA LUMPUR (Aug 27): AirAsia Bhd has obtained permission from the High Court here to challenge the Malaysian Aviation Commission's (Mavcom) decision to impose a financial penalty on the airline over its recent free seats promotion, which the commission said does not comply with the Malaysian Aviation Consumer Protection Code 2016 (MACPC).
The decision was made by Justice Datuk Aliza Sulaiman, who heard the company's leave application for judicial review. For a judicial review, leave is granted to hear the merits of a case if the application is not considered "frivolous and vexatious".
Counsel David Dinesh Mathew and Priscilla Faith Lim appeared for AirAsia. Mavcom was not represented because, during this initial stage, the application is heard ex parte or from only the company's side.
AirAsia filed the challenge on June 19, seeking an order of certiorari to quash Mavcom's decision, outlined in an April 3 letter, that the airline’s February 2025 campaign violated the MACPC, specifically sections that state an airline must publish an all-inclusive price for any airfare it offers or advertises, and that it must specify what is included in this price, including charges that are unavoidable but foreseeable.
The airline is also seeking to quash the RM80,000 financial penalty that Mavcom imposed on it in June this year and a declaration from the court that its February free-seat advertisements complied with the MACPC and were not false, misleading or deceptive. It is also seeking a declaration that Mavcom's "Guidance on Advertisement of Air Fare" was issued without legal basis and is therefore illegal. Alternatively, it seeks a declaration that Mavcom's actions regarding the guidance are beyond the scope of the Mavcom Act 2015.
Mathew, representing AirAsia, argued in his submissions that the airline has been running this signature campaign in Malaysia for the past 19 years and that the campaign has become "an integral part of Malaysian air travel".
He said consumers are "fully aware of the nature of this campaign, in particular its 'free seats'", as he pointed out that the word "free" in the advertisements is followed by an asterisk to indicate that the campaign is subject to further terms and conditions, which are clearly displayed at the bottom of the advertisement. "The other charges that need to be paid are indicated or displayed on the advertisement," he added.
He also noted that Mavcom had never raised any issues with the campaign up until late 2024, even though the airline has been running the campaign since the commission was established in 2015. AirAsia further argued that the Mavcom Act does not grant the commission the power to issue the "Guidance on Advertisement of Air Fare".
Differences between the February 2025 campaign and past campaigns
Mathew highlighted that the February 2025 advertisements clearly differentiated between "free seats" and "total airfare", and that consumers were provided with a "clear and itemised breakdown of all applicable charges" at every stage of the booking process.
The airline also claimed that its advertising materials align with the consumer protection principles upheld by the MACPC and its amendments.
The airline also claimed that "Malaysian consumers have a well-established familiarity and understanding of the Free Seats Campaign". It cited the Asean Consumer Empowerment Index 2020, which indicated that "Malaysian consumers are highly knowledgeable in detecting misleading advertisements, compared to consumers in other Southeast Asian countries".
Rolled out on Feb 15, its "free seats" promotion offered up to 15 million promotional seats this year to 130 destinations for those who booked flights between Feb 15 and 23 for travel from July 1, 2025, to June 15, 2026.
The advertisement, which appeared on multiple online and offline platforms, stated in fine print that the "free seat" fare was only for the base fare and "excludes airport taxes, fuel surcharges and other fees". It also stated that seats were subject to availability.
According to the MACPC, the all-inclusive price that airlines must publish must include the "base fare (including all charges payable to the airline), any taxes and fees imposed by the government, any fees and charges prescribed under any written law, fuel surcharge and such other fees and charges as determined by the commission to be imposed on consumers by providers of air services".
To provide clarity on this, Mavcom had, in September last year, issued guidelines on how the industry should and should not advertise their airfares in the form of the 'Guidance on Advertisement of Air Fare'. The guidelines explicitly stated that using words like "free", "without charge", or similar descriptions is not permitted when there are applicable fees and charges that consumers must pay.
"Where such payments need to be made, consumers must be made clearly aware of all the payments involved. For example, government-imposed taxes," the guidance read.