Malaysia Suspends SKS Airways’ AOC Over Compliance Issues

Malaysia’s Civil Aviation Authority (CAAM) has temporarily suspended the Air Operator Certificate (AOC) of SKS Airways, effective October 22, 2024, due to non-compliance with regulatory requirements. This suspension, which lasts for 90 days, puts a halt to the airline’s operations as it works to address compliance issues identified by CAAM.

Reasons Behind SKS Airways’ AOC Suspension

CAAM CEO Norazman Mahmud confirmed the suspension, stating that SKS Airways “did not satisfy the AOC requirements.” The airline must now address these deficiencies within the 90-day period, after which CAAM will conduct a safety audit to determine whether the suspension will be lifted or if the airline’s AOC will be permanently revoked. Although the AOC was originally valid until September 30, 2025, SKS’s operations now hinge on meeting CAAM’s requirements.

Operational Impact and Regulatory Requirements

In Malaysia, airlines require both an AOC and an air services license from the Malaysian Aviation Commission (MAVCOM) to operate legally. SKS’s current air services license is valid only until December 31, 2024, adding further urgency for the airline to resolve compliance issues if it wishes to resume operations.

SKS Airways, part of the Johor-based SKS Group controlled by businessman Alan Sim See Kiong, launched scheduled services in early 2022 with two DHC-6-300 Twin Otter aircraft, primarily connecting the Malaysian mainland with island resort destinations. The airline had ambitious expansion plans, including an agreement signed in May 2023 with Azorra and Embraer to lease ten E195-E2 jets, targeting regional growth opportunities. However, financial setbacks and slot availability issues at Kuala Lumpur’s Subang Airport derailed these plans.

SKS Airways’ Financial and Operational Challenges

In November 2023, SKS Airways suspended its Twin Otter operations, reportedly due to financial difficulties. While the airline had initially planned to proceed with its E195-E2 expansion, a shortage of available slots at Subang Airport in Kuala Lumpur forced SKS to abandon the lease agreement in mid-2024. The airline had applied for slots to operate around 40 daily flights but received approvals for only five or six. Further compounding these issues, SKS faced stringent regulatory scrutiny from CAAM while seeking certification to operate the E2 jets, which, along with funding challenges, impeded its expansion plans.

SKS Airways posted a financial loss of MYR32.28 million (USD7.4 million) for the year ending December 31, 2023, with accumulated losses totaling MYR85.67 million (USD19.6 million) by the same date, reflecting the ongoing financial pressures on the airline.

Future Prospects and Regulatory Audit

The suspension of SKS Airways’ AOC adds further uncertainty to the airline’s future as it works to comply with CAAM’s requirements. The outcome of CAAM’s post-suspension safety audit will determine whether SKS can regain its AOC and resume operations. Failure to meet regulatory standards could result in permanent revocation, severely impacting SKS’s ability to continue as a commercial airline.

As SKS Airways works to rectify its compliance issues, the suspension marks a significant setback for the airline and highlights the operational and financial challenges it faces. If SKS can address CAAM’s requirements and secure the necessary certifications, the airline may still have a chance to pursue its growth ambitions in Malaysia’s aviation market.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com