KUALA LUMPUR (June 26): The Dewan Rakyat on Wednesday passed two bills, paving the way for a merger between the Malaysian Aviation Commission (Mavcom) and the Civil Aviation Authority of Malaysia (CAAM) into a single regulatory agency.

The Malaysian Aviation Commission (Dissolution) Bill was passed via a bloc vote, with 93 members of Parliament (MPs) supporting it, 63 opposing, and 66 absent.

Meanwhile, the Civil Aviation Authority of Malaysia (Amendment) Bill was passed via a majority voice vote.

Mavcom is currently in charge of regulating the aviation industry’s economic and commercial matters, while CAAM is responsible for technical matters and safety.

Under the Malaysian Aviation Commission (Dissolution) Bill, the government seeks to dissolve Mavcom, transferring all its powers, rights, duties, liabilities and obligations to CAAM.

The bill also seeks to transfer all existing agreements, deeds, documents and other instruments from Mavcom to CAAM.

Meanwhile, the Civil Aviation Authority of Malaysia (Amendment) Bill aims to establish CAAM as the sole regulatory body for the civil aviation industry in Malaysia.

The bill includes amendments to regulate economic matters in the industry, improve connectivity, promote competition, ensure the efficient operation of aerodromes and ground handling services, and encourage timely investments to meet the country's evolving needs.

When tabling the bills, Transport Minister Anthony Loke stressed that the merger of Mavcom and CAAM aims to reduce bureaucracy and improve the efficiency of civil aviation service delivery, especially in licensing services.

"With the merger of Mavcom and CAAM, the aviation industry will no longer require two separate regulatory bodies to monitor the affairs of the nation’s civil aviation sector," Loke said.

He added that a single regulatory mechanism is used in countries such as the US, UK, Germany, China and Singapore.

Pushback from Opposition

The government’s plan to merge Mavcom and CAAM has faced strong pushback from the Opposition bloc, as it raised concerns over the power held by Mavcom to independently decide on regulations for the industry being transferred to the minister.

"If we look at Section 18 of CAAM Act 2017, after Mavcom merges into CAAM, any decision they make will need to refer to the government and comply with the minister's direction. This is why we are concerned, especially if it involves decisions that affect public interest," said Datuk Idris Ahmad (Perikatan Nasional-Bagan Serai) during the debate session.

Additionally, several Opposition MPs claimed that the merger was part of the government’s agenda to bulldoze a private deal involving Malaysia Airports Holdings Bhd (MAHB) (KL:AIRPORT).

"Mavcom is actually the economic regulator for MAHB; they are the last defence against the sale of MAHB shares to BlackRock, as they are MAHB’s economic regulator," said Wan Ahmad Fayhsal Wan Ahmad Kamal (Perikatan Nasional-Machang).

Khazanah, EPF, GIP and ADIA — via a consortium named Gateway Development Alliance Sdn Bhd (GDA) — are in the midst of taking MAHB private. However, the deal has been controversial as the US-based investment company BlackRock, accused of involvement in the Palestinian genocide, is in the process of acquiring GIP.