ÿ�մ���

KUALA LUMPUR (June 26): The Civil Aviation Authority of ÿ�մ��� (CAAM) is now financially self-sufficient after revising its aviation fees and charges on Jan 1 this year, moving away from decades of government funding.

A key change was to the Route Air Navigation Service (RANS) charges, which airlines pay based on each flight and the aircraft’s maximum take-off weight (MTOW). The charges, which hadn’t been revised in over 30 years, were previously between 10 sen and 60 sen per nautical mile, with a minimum of RM10 per flight.

RANS charges are now set at a flat rate between RM139 and RM593 per flight, depending on the aircraft’s MTOW. The Ministry of Transport (MOT) has approved further, smaller increases, scheduled for 2028 and 2031.

“The first hike was significant — it hasn’t been raised in over 30 years,” said Transport Minister Anthony Loke Siew Fook in an interview with��The Edge.

CAAM chief executive officer Datuk Captain Norazman Mahmud said the increase brings ÿ�մ���’s air navigation service charges in line with regional standards, such as Singapore’s.

RANS charges are now CAAM’s main revenue source, with about half of it coming from foreign airlines. These fees cover air traffic control, navigation, and communication services for all flights entering ÿ�մ���n airspace — specifically, the Kuala Lumpur and Kota Kinabalu flight information regions, unless exempted under the Civil Aviation (Aerodrome Operations) Regulations 2016.

Loke: Anything to do with aviation, it’s just CAAM. (The Edge filepix by Low Yen Yeing)

CAAM CEO Datuk Captain Norazman Mahmud

According to MOT estimates, an Airbus A320 flying internationally previously paid an average of RM83 to use ÿ�մ���n airspace. Now, the same flight pays around RM405 — a 388% increase.

“Most of these foreign airlines are heading to Singapore’s Changi Airport but pass through our airspace, and we were charging them far too little,” said Loke.

Despite the steep increase for airlines, the impact on passengers is modest. CAAM estimates that domestic fares may rise by just RM2.50 per passenger, assuming an 80% load factor. The aviation sector typically breaks even at a load factor of 70% to 80%.

“The impact of the fee hike is about RM2 per passenger. If we’re talking about impact, it’s one of the smallest components of overall airline costs,” Loke said.

“We are confident that with this new revenue model, CAAM no longer needs government funding to operate,” he added. Previously, CAAM relied on RM150 million to RM200 million annually from public funds.

So far, it’s working: from January to May 2025, CAAM collected RM174 million — nearly double the RM90 million collected in all of 2024. For the full year, revenue is expected to exceed RM300 million.��

Independent statutory status starting Aug 1, 2025

Starting Aug 1 this year, CAAM will become a statutory body with separated remuneration and exempted (BBDSB) status, granting it financial independence and the ability to set its own pay structure, separate from the civil service. This allows CAAM to offer market-rate salaries to technical staff, helping it attract and retain top talent.

At the same time, CAAM will officially absorb the ÿ�մ���n Aviation Commission (Mavcom). Currently, CAAM handles civil aviation safety and technical matters, while Mavcom oversees commercial and economic regulation. After the merger, all aviation-related services will be handled by CAAM — creating a single-window system for the industry.

“Anything to do with aviation, it’s just CAAM — licensing, pilot authorisation, airline registration, ground handling — it all goes through one channel,” Loke said.

This follows legislative changes in July last year: the ÿ�մ���n Aviation Commission Act 2015 was repealed, and the Civil Aviation Authority of ÿ�մ��� Act 2017 was amended to consolidate powers under CAAM. Recall that Loke had, in 2019, proposed to the Cabinet to merge Mavcom with CAAM.

CAAM manages 135 aviation-related charges, seven of which were revised upwards this year. It also introduced 25 new fees as part of its revenue overhaul.

These funds will support navigation infrastructure upgrades and improve service quality. “CAAM needs to invest in the latest technology. If procurement remains under the government, you miss one or two tech generations before getting anything,” Loke said.

The revised structure gives CAAM the autonomy it needs to operate efficiently — and marks a new chapter for aviation regulation in ÿ�մ���. Nevertheless, CAAM will remain under the purview of the MOT.

To compete for talent with industry-level salaries

In November 2019, ÿ�մ���’s civil aviation safety rating was downgraded to Category 2 by the US Federal Aviation Administration (FAA), after an audit found that CAAM did not fully comply with the International Civil Aviation Organization’s (ICAO) safety standards. The audit cited shortcomings in areas such as technical expertise, trained personnel, record-keeping, and inspection procedures.

Loke said the downgrade was linked to CAAM’s inability to hire enough qualified technical personnel (QTP) due to non-competitive salaries.

“The root cause was that CAAM couldn’t offer competitive pay. You need experienced pilots to serve as QTPs, but CAAM was paying only about 20% to 30% of what pilots normally earn,” he added.

He said the downgrade served as a wake-up call for the country, and pushed the government to take steps even more resolutely to enhance and increase the standing of CAAM.

ÿ�մ��� eventually regained its FAA Category 1 rating in October 2022, after improvements were made.

Loke also pointed out that Mavcom, as an independent statutory body, had always had the flexibility to set its own pay structure.

“Mavcom could always pay market rates and hire whomever they need,” he noted.

With Mavcom’s upcoming merger into CAAM on Aug 1, Loke assured that the economic and commercial functions of the aviation sector will continue to be regulated — now under the expanded CAAM.

“The specific roles or��perjawatan��(staffing) will be created under CAAM, so there’s no uncertainty on that score. Mavcom’s functions will be fully absorbed.”

The current commission members of Mavcom are its executive chairman Datuk Seri Saripuddin Kasim; Datuk Jana Santhiran Muniayan, who is the MOT’s secretary general; Ministry of Economy secretary general Datuk Nor Azmie Diron, Datuk Roger Tan Kor Mee, Datuk Wan Kamaruzaman Wan Ahmad, Datu Wong Hee Sieng, and Wee Hock Kee.

"Mavcom will be dissolved, so of course the dissolution involves its��board," said Loke.

"But we have some room in terms of more (new) appointments to the enlarged CAAM’s board. That's because some of the existing commissioners’ terms have already expired."

Read also:
��