Bangkok Post
2nd Feb 2008
BOONSONG KOSITCHOTETHANA
Singapore _ With nationalistic fanfare, the low-cost carrier AirAsia (AA) declared yesterday ''People's Day'' to mark the liberalisation of the Kuala Lumpur-Singapore air route that had been monopolised by the flag carriers of Malaysia and Singapore for 35 years.An AA Airbus A320 with 180 passengers on a flight from Sepang touched down at Changi Airport to mark the first flight from airlines other than Malaysia Airlines (MAS) and Singapore Airlines (SIA).
On the same day, Singapore-based budget carriers Tiger Airways and Jetstar Asia also inaugurated their services from the island republic on the once restricted lucrative route, minus any fanfare.
After six years of lobbying the Malaysian government, AA received the right to operate two daily flights, also on A320 jetliners, on the route. Tiger and Jetstar Asia, on a reciprocal basis, were each allowed to operate a daily flight.
''This is a historic day for Asian aviation. I believe it's a start of mass liberalisation and the end of the journey of high fares (charged by the incumbents),'' AA chief executive Tony Fernandes said.
The liberalisation of the Singapore-Kuala Lumpur route was advanced by about one year as part of the early stage implementation of Asean' open skies policy, which was originally due to take effect in January 2009.
Malaysia-based AA, Southeast Asia's largest no-frills carrier with sister airlines in Thailand and Indonesia, said destroying the monopoly would give consumers both choice and benefits from competition, resulting in lower prices.
AA, along with Tiger Airways and Jetstar Airways, charge about one-third of the fares imposed by MAS and SIA. Departing from Singapore on MAS or SIA, a round-trip economy class ticket on the Kuala Lumpur route, which takes about 45 minutes, currently costs about S$450, including taxes.
''There is a new girl in town _ twice the fun half the price,'' Mr Fernandes said, in a reference to the ''Singapore Girl'', who for decades has been the symbol of SIA.
According to the Civil Aviation Authority of Thailand (CAAS), about 2.5 million passengers flew on the Singapore-Kuala Lumpur route last year.
Mr Fernandes told reporters that passenger traffic on the route could jump significantly as it is become more affordable to fly.
''[Passenger numbers] should be eight or nine million a year,'' he said, but added that volume cannot be achieved in the next one or two years as the number of flights the three budget carriers are allowed to fly are still restricted.
However, the Sydney-based Centre for Asia Pacific Aviation said its research indicated that the Kuala Lumpur-Singapore market could triple in size by 2011, two years after full liberalisation, bringing ''massive economic benefits on each side.''
The AA boss disclosed that AA has applied for the rights to introduce more routes between Singapore and other cities in Malaysia which are still restricted to the flag carriers.
''We hope to start [new routes from Singapore] in March and April; our first choices would be Kota Kinabaru, Penang, Kuching and Langkawi, which are poorly served now by both (MAS and SIA) and the fares are very high,'' he said.
Mr Fernandes noted that because AA had ordered 175 A320 aircraft, it had the capacity to open many new routes quickly.
http://www.bangkokpost.com/020208_Business/02Feb2008_biz35.php
