New development in case of Malaysia Airlines passenger allegedly behind bomb hoax that forced flight to return to Sydney Airport

A father who caused chaos at one of Australia's busiest international airports after claiming he was carrying a bomb has been banned from boarding another plane after being released on bail.

Muhammad Ali Arif, 45, was dramatically arrested at Sydney airport in August after his alleged tirades against staff and fellow passengers forced the pilot to make a U-turn in mid-air en route to Kuala Lumpur.

Police allege the Canberra man falsely claimed to have had explosives on board the Malaysia Airlines flight and failed to follow cabin crew safety instructions before AFP officers stormed in.

After nearly four months in custody, Mr Arif was granted bail in the Sydney High Court by Justice Peter Hamill on Tuesday so he could live in a remote town near Deniliquin, 800km from Sydney.

The court was told that Mr Arif would live with a friend in the town of 500 and work in a supermarket, but would not be allowed to board planes or come within 1km of an international airport.

Judge Hamill said that while he doubted whether some of the bail conditions were enforceable, Mr Arif was undergoing regular psychiatric treatment and was not likely to appear in court until early 2025.

Mr Arif smiled as he learned he would be released from Silverwater prison in Sydney's west, with the granting of bail marking the end of a months-long campaign by his lawyer, Oussama Elfawal.

Importantly, Mr Elfawal foreshadowed that although Mr Arif's case is still more than a year away from trial, it would likely hinge on his mental disability and how that could affect his guilt.

“There is evidence that Mr Arif suffered a mental health crisis leading up to the time of the alleged offence,” Judge Hamill said. 'That has now been confirmed in three reports by psychiatrist Dr. Olav Nielssen.'

'Dr. Nielssen described the effect and speech patterns during the consultation not long after the incident and came to the conclusion that he had experienced a psychotic episode at the time.'

In his report, Dr. Nielssen detailed delusions as part of Mr Arif's alleged psychosis and said he should be released to a psychiatric hospital “initially”.

That belief changed after the final report in which Mr Arif said he had controlled his emotions, no longer felt his thoughts racing and had been prescribed a mood stabilizer.

The dramatic mid-air turnaround made national headlines earlier this year and caused chaos at Sydney's busy international terminal, with the plane being quarantined after landing at the end of the tarmac.

Mr Arif was filmed telling passengers and staff: 'Don't touch my bag, it might explode', 'You don't know what I have here so go back', and asked passengers if they were a 'slave of Allah ' goods.

After returning to Sydney, the 200 other passengers on board were moved to another part of the plane before AFP stormed the plane and took Mr Arif, who reportedly continued to resist, into police custody.

In his judgment, Judge Hamill said the prosecution case was strong and that the videos of the event previously shown in court create 'a somewhat terrifying picture'.

'That is, from the perspective of the cabin crew and passengers. That is stated in the fact sheet and is shown graphically in the video played in court,” Judge Hamill said.

Mr Arif will appear again in Sydney's Downing Center Local Court in January for certification. No charges were filed for either violation, one of which can only be punished with a fine.