Malaysia’s Aviation Commission (Mavcom) has threatened action against cash-strapped AirAsia X after the airline secured an unlikely agreement with creditors.
The airline’s proposal to pay back just 0.5% of its huge debt was approved by creditors.
Mavcom takes issue with the airline’s policy of classing customers awaiting refunds as creditors.
It is a move which was heavily criticised by consumer rights groups.
Owing RM600 million ($140 million) in refunds, AirAsia X plans to repay just RM3 million in total.
Mavcom said it will take action if AirAsia X fails to reimburse in full.
"Mavcom has clearly and unequivocally urged AAX to reassess its proposal to treat air travel consumers as creditors and to pay only 0.5% of the value of tickets purchased. AAX should reimburse air travel consumers for the tickets purchased," it said.
"Mavcom is committed to discharging its duties under Act 771 and the Malaysian Aviation Consumer Protection Code in ensuring that air travel consumer rights are safeguarded."
The airline has not indicated it will pay out any refunds in full.
"We wish to assure all passengers affected by the restructuring that it is the firm intention of AAX to put in place privileges in the form of travel credits, which can be utilised for future purchases of flight tickets once international borders reopen," said Tony Fernandes, co-founder and director of AAX.
