The US States Federal Aviation Administration (FAA) downgraded Malaysia’s air safety rating on November 11, impeding the country’s airlines from adding new routes to the United States. The planned launch by AirAsia X (D7, Kuala Lumpur Int'l) of fifth freedom flights between Japan and the US west coast could be delayed, Forbes reported.

The downgrade to a Category 2 safety ranking is an assessment of Malaysia’s ability to provide oversight of its aviation industry and to adhere to international standards. The ranking does not imply that Malaysian airlines are unsafe and it does not affect existing flights.

The Civil Aviation Authority of Malaysia (CAAM) commented in a statement that it regretted the decision, which it said stemmed from an April 2019 FAA review. It urged the agency to reassess its operations within the coming year.

“Whilst CAAM acknowledges that in carrying out its duties as an aviation regulator, some shortcomings exist. We wish to emphasise that the assessment only covered CAAM's role as an aviation regulator,” it said. “This categorisation is NOT an assessment of airlines, airports or air traffic services that fall under the purview of CAAM. However, due to being listed as a Category 2 Regulator, airlines licensed by CAAM will not be able to add new routes to and from the United States.”

It added that “plans are already well underway to address the findings of the audit” and restoring its Category 1 rating. A US official told Reuters that the government of the United States was working with the CAAM to this end. CAAM's chief executive resigned on November 1 and an executive committee has taken over in the interim.

Currently, the only Malaysian carrier operating scheduled passenger flights to the United States is AirAsia X, from Kuala Lumpur to Honolulu via Osaka Kansai, Japan, according to the ch-aviation capacities module.

AirAsia X has sensed an opportunity to expand to the US west coast, stimulating demand by undercutting high outbound Japan fares, according to Forbes. AirAsia Group said in 2018 that it would serve the west coast in 2019, naming Los Angeles Int'l, Oakland, and San Francisco, CA as possible destinations, but the plans were pushed back to 2020 due to aircraft delivery delays.