PETALING JAYA (Nov 23, 2012): AirAsia Bhd has been granted with an air operator’s certificate (AOC) by the Department of Civil Aviation (DCA) to fly for another five months — instead of a two-year period — for not meeting regulatory standards, said sources.

The current AOC is valid until April 2013.

Sources told SunBiz that AirAsia had only obtained a six-month AOC — an approval granted from the DCA to an aircraft operator to allow it to use aircraft for commercial purposes — after periodical audit findings by DCA showed shortcomings in AirAsia’s flight operations procedures and practices including flawed communications between flight operations and pilots, an outdated manual and flight operations not in keeping with the manual.

The six-month period allows for AirAsia to work with the DCA to bring its flight operations procedures and practices up to mark.

It is also understood that AirAsia’s head for flight operations has been changed due to the action.

Three key posts in an airline are nominated with the approval of the DCA, namely the head for flight operations, engineering maintenance system and crew training.

“The fact that they have not grounded AirAsia aircraft shows that it’s not a serious safety issue, but this action still serves as a warning,” one source told SunBiz.

Scheduled commercial airlines based in Malaysia are awarded two-year renewals of AOC by DCA.

In other markets, depending on the track record of the airline, AOCs can be valid for up to five years before a renewal is due.

While the audit is a biennial affair, the DCA conducts inspections on airlines at least once a year.

According to another source, a two-year renewal is given if airlines meet standards set by the regulator. Otherwise they are given a period of time, depending on the issue, to comply before a renewal of AOC is given, or it is revoked entirely.

In the event of a withdrawal of an AOC, the airline can work to meet standards set and re-apply for an AOC which will have to be approved by the Cabinet.

AirAsia and DCA officials did not respond to questions sent via e-mail, as at press time.

An industry observer said it is unlikely that AirAsia will let the situation progress to an outright withdrawal of AirAsia’s AOC, ultimately grounding its flights.

“They (AirAsia) will definitely address whatever issues DCA have and make sure they bring in the right people and fire the wrong people, because too much is at stake.”

He added that while the action taken by DCA is unlikely to have any financial impact on AirAsia as a company, it may impact its reputation as an airline and its ability to secure the best deals for financing in the future.