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FAA downgrade has nothing to do with safety of M’sia’s aviation sector

KUALA LUMPUR: The US Federal Aviation Administration’s (FAA) downgrade of Malaysia’s aviation safety rating has nothing to do with the 2014 twin tragedies of MH17 and MH370 or the recent technical glitch at Kuala Lumpur International Airport, said the Civil Aviation Authority of Malaysia (CAAM).

“None of the questions [raised during the FAA’s recent inspection] has anything to do with it (the twin tragedies and technical glitch) whatsoever and the air traffic control services, which are [under the purview] of our organisation, were not assessed. It (the assessment) was purely on our regulatory function,” CAAM board member Afzal Abdul Rahim told a press conference yesterday.

He also dismissed concerns about the safety of Malaysian air carriers and security of airports in Malaysia following the downgrade by the FAA.

“What was found by the FAA is that they did not believe that the CAAM should be categorised as a Category 1 aviation regulator. There is absolutely no assessment of airlines, air traffic control services or airports. What was audited was the CAAM. We also have to make this very clear that this [downgrade] was due to the CAAM’s deficiency and shortcomings. It is our failure,” he stressed.

“The FAA can, when it likes, audit or assess counter-regulators or peer regulators whose airlines operate in the US. So, if

[AirAsia X Bhd co-CEOs and co-founders Tan Sri] Tony [Fernandes and Datuk] Kamarudin [Meranun] didn’t launch flights to Honolulu, the FAA would not have come here in the first place. This is because you first need to operate in their country,” said Afzal.

“The last audit the FAA did was in 2003, when Malaysia Airlines used to have flights to New York and Los Angeles,” he added.

Malaysia was downgraded to Category 2 status on Monday by the FAA, after the CAAM failed the US regulator’s aviation safety oversight audit in April. On announcing the downgrade on the same day, the CAAM admitted it was due to its shortcomings as an aviation regulator.

Afzal listed the CAAM’s shortcomings as related to the legislative, budgeting, human resources, documentation and areas of oversight.

“The shortcomings refer to inadequate actions in respect of the audit findings. For example, the FAA told us that we do not have the authority to fine or penalise our licensees for any offences. But these are our Malaysian laws where the CAAM does not have the authority to do so,” he said.

“Another challenge is that we have to update our aviation regulations such as to govern the flying of drones,” he added.

Datuk Razali Mahfar, a board member of the CAAM, also pointed to the regulator’s tight budget to fulfil its mandate.

“If we look at the current revenue structure of the CAAM, we are generating about RM120 million [per year] from RM95 million of air navigation charges and about RM25 million from regulatory charges. But the [annual] operating expenditure of the CAAM is RM350 million,” he said.

“The design of the organisation is also not poised to be a fully functional entity. This is because as a government agency previously, we were dependent on the Public Service Department Malaysia for our human resources needs, finance had been from the Accountant General’s Department of Malaysia and information technology came from the Malaysian Administrative Modernisation and Management Planning Unit,” said Razali.

He noted that these functions are still “not well resourced” and that the CAAM would be looking at these issues as part of efforts to regain Category 1 status.

Afzal concurred, noting that the budget constraints also make attracting and retaining top talent a challenge.

He said out of the 300 questions raised during the FAA’s recent inspection, the US aviation regulator identified 33 flaws the CAAM needs to rectify if Malaysia is to regain Category 1 status. However, the CAAM is of the view that there are only 22 areas that need to be rectified. This leaves 11 issues that are ambiguous, he added.

“We are confident that we can regain it (Category 1 status) within 12 months. We must first convince the FAA to come and visit us [for a reassessment] in 12 months. They are quite busy because they have their own issues to deal with,” said Afzal, adding that based on other countries’ experience, the typical period for a country to regain its Category 1 status is between one and two years.

The downgrade in air safety rating by FAA was Malaysia’s first since achieving Category 1 status in 2003. Analysts said other countries such as those in the European Union, Japan or China may follow suit.

“That is an indirect or consequential effect of the FAA downgrade. (For instance,) a neighbouring country was downgraded a while ago and for a while other (foreign) regulatory authorities did come and perform air safety audits on its aviation authority. So, we are expecting the same thing to happen,” said Afzal.

Asked on Prime Minister Tun Dr Mahathir Mohamad’s remarks on Monday that he had no knowledge about the downgrade of Malaysia’s air safety rating by FAA, Afzal said: “We are an agency under the purview of the ministry of transport. The transport minister was informed of the decision. We leave it to the minister to inform the Cabinet and the prime minister.”

Another CAAM board member Ragunath Kesavan dismissed claims that the resignation of CAAM’s chief executive officer (CEO) Ahmad Nizar Zolfakar was due to the downgrade by FAA.

He clarified that Ahmad Nizar had tendered his resignation a month before the FAA audit report was released, but declined to reveal the reason for his departure.

“We have to respect his wishes. He came back to become the CEO of CAAM after retiring from the Department of Civil Aviation Malaysia and served for more than a year,” said Ragunath.

Meanwhile, the search is on for a new CEO, Afzal said, adding that this will not hold back plans by CAAM to regain Malaysia’s air safety ranking to Category 1.

Source: TheEdgeMarkets