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SIN- KUL Route To Be Deregulated?  
User currently offlineGneissGuy From Singapore, joined Jul 2006, 200 posts, RR: 0
Posted (8 years 3 weeks 6 days 23 hours ago) and read 3411 times:

This story was printed from TODAYonline


Cheap flights to KL in the air?

Thursday • August 3, 2006

Tor Ching Li
chingli@newstoday.com.sg

TIGER Airways, the budget carrier co-owned by Singapore Airlines (SIA), informed the Singapore Government yesterday of its desire to get a bite of the Singapore-Kuala Lumpur (KL) route.

This comes in response to recent media reports that its cross-border competitor, AirAsia, has made a request to the Malaysian government for permission to fly from the Kuala Lumpur International Airport to Changi's Budget Terminal.

Said a Tiger Airways spokesperson: "Tiger Airways has approached the Civil Aviation Authority of Singapore and advised the CAAS of its desire to operate this route at the earliest opportunity."

Tiger Airways said it would be able to offer fares comparable to travel by coach.

Currently, coaches charge between $35 and $45 for a one-way trip that takes around five hours. And while a flight from Singapore to KL takes under an hour, it costs around 10 times as much as a coach ride.

The moves by the two budget airlines could slash both the cost and time it takes to get to KL.

Since he launched his budget carrier in 2002, AirAsia's Tony Fernandes had made no secret of his desire to fly direct into Singapore, but had no success approaching the Singapore Government directly.

But while both budget carriers may be raring to go, the national carriers may not be too keen to loosen their grip of the route, especially Malaysia Airlines (MAS), say analysts.

Under the current Air Services Agreement between Singapore and Malaysia — which has not changed since 1980 — all air-traffic rights between both countries have been fully used up.

This means that there is no room for airlines, other than SIA and MAS, to service the route. SIA and MAS operate 182 of the 213 flights a week between Singapore and Kuala Lumpur, usually at 80 to 90 per cent of their capacity. Both airlines share the revenue raised from the route at a 50:50 ratio.

"The main issue that prevents the adoption of an open-skies policy for the KL-Singapore route seems to be the perception that the gains from liberalising this sector will be asymmetric," said an industry observer.

"One argument along this line is that Singapore will benefit more than Malaysia as SIA and Tiger can then fly to many destinations in Malaysia, whereas MAS can only fly to one."

Singapore's stand has been that it would be happy to expand the current agreement, but it would need Malaysia's agreement to liberalise the route.

According to Standard & Poor's aviation analyst Shukor Yusof, this prospect seems more likely than before.

"The Malaysian government's support could come as part of the ongoing rationalisation of the domestic aviation industry, but then it would come down to a question of whether MAS will be agreeable," said Mr Shukor.

Mr Nicholas Ionides, Asia editor of aviation journal Flight International, said that it is a matter of time before Malaysia and Singapore open up the much-guarded route.

"Both countries are two of the strongest advocates of open skies, except when it comes to each other. There is a huge potential for growth between the two markets with lower airfares and more frequent flights. Singapore-KL is the ideal budget carrier route," said Mr Ionides.

Analysts also point towards the Association of South-east Asian Nation's commitment to lift all restrictions on passenger flights between capital cities in the region by 2008 as a reason for the liberalisation of the Singapore-KL route as inevitable.

Copyright MediaCorp Press Ltd. All rights reserved.

11 replies: All unread, jump to last
 
User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4503 posts, RR: 72
Reply 1, posted (8 years 3 weeks 6 days 20 hours ago) and read 3329 times:

A liberalization of the SIN-KUL market is long overdue, and both SQ and MH have been applying consistent pressure on their respective governments to keep the current ASA, and thus the exorbitant fares charged on this route, in place. I am not a big fan of the likes of Air Asia, but here is a market where the local LCCs would do a great job in bringing these fares down to more reasonable levels. I am not holding my breath, though, and expect SQ and MH to put up some serious fight to defend their joint turf.

User currently offline6thfreedom From Bermuda, joined Sep 2004, 3325 posts, RR: 20
Reply 2, posted (8 years 3 weeks 6 days 17 hours ago) and read 3205 times:

Quoting HB-IWC (Reply 1):
both SQ and MH have been applying consistent pressure on their respective governments to keep the current ASA, and thus the exorbitant fares charged on this route, in place

Isn't this the case more so know, as SQ only operate widebodies, and MH has shedded so many of its domestic routes?

You could almost consider SIN-KUL a domestic sector is i suppose, much the same way that QF and NZ operate on the tasman. a few foreign carriers, but they pretty much rule the roost!


User currently offlineB742 From United Kingdom, joined Mar 2005, 3767 posts, RR: 19
Reply 3, posted (8 years 3 weeks 6 days 16 hours ago) and read 3187 times:

Intresting developments.

AirAsia wants and has been wanting to fly the KUL-SIN-KUL route for sometime now, but It never could get rights to fly into SIN. I expect things will change now after Malaysian aviation has changed after Aug 1st.

It's now likely that there will be a Malaysia/Singapore compramise:


  • AirAsia will be given KUL-SIN-KUL rights and will be allowed to fly into the LCCT at SIN
  • In return, Tiger Airways will also be allowed to operate on the same route, SIN-KUL-SIN will be granted and Tiger Airways will also be granted use of the LCCT at KLIA


By the way for those of you that are not familiar with the term LCCT, it means Low-cost-carrier-terminal  Smile

I would expect if Tiger Airways is allowed, then AirAsia will soon follow (or vice-versa)

The fares currently can be quite high between SIN-KUL due to premium carriers such as MAS and SQ operating the route. There is quite a high demand, SQ often uses 773's.  Smile

Rob!  wave 


User currently offline9MMAR From Malaysia, joined Jul 2006, 2110 posts, RR: 18
Reply 4, posted (8 years 3 weeks 6 days 16 hours ago) and read 3165 times:

A great development. However, in Malaysia, there are more hypes about a development of a bullet train to serve Kuala Lumpur and Singapore, rather than to allow LCCs to operate to both capitals.

Quoting B742 (Reply 3):
It's now likely that there will be a Malaysia/Singapore compramise:

AirAsia will be given KUL-SIN-KUL rights and will be allowed to fly into the LCCT at SIN

In return, Tiger Airways will also be allowed to operate on the same route, SIN-KUL-SIN will be granted and Tiger Airways will also be granted use of the LCCT at KLIA

Is it possible? How about Jetstar Asia/Valuair? Didn't they want to fly to KUL as well? Will SQ stop sending its B772 to KUL and ask Silkair to serve the route if the plan is going to be realized? Make more sense to me.

Quoting B742 (Reply 3):
There is quite a high demand, SQ often uses 773's

I think it's B772, Rob.


User currently offlineB742 From United Kingdom, joined Mar 2005, 3767 posts, RR: 19
Reply 5, posted (8 years 3 weeks 6 days 16 hours ago) and read 3151 times:

Quoting 9MMAR (Reply 4):
I think it's B772, Rob.

Ah thanks, well 772's then  Wink

I saw a SQ 773 in KLIA the other day, must of been a substition  Smile

Quoting 9MMAR (Reply 4):
s it possible? How about Jetstar Asia/Valuair? Didn't they want to fly to KUL as well? Will SQ stop sending its B772 to KUL and ask Silkair to serve the route if the plan is going to be realized? Make more sense to me.

I agree, Silkair could fit into KUL nicely. I think the Malaysia/Singapore goverment are only willing to let 2 LCC's into the route. Before they wouldn't even let one (AirAsia) into SIN! I think that Tiger Airways has realised that if AirAsia is ti be allowed then "why cant we". Thus the spark in intrest!

Although I don't think Tiger into KUL will make AirAsia very happy as they would have to share the LCCT with Tiger Airways  Smile

Rob!  wave 


User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4503 posts, RR: 72
Reply 6, posted (8 years 3 weeks 6 days 16 hours ago) and read 3133 times:

Quoting B742 (Reply 5):
Although I don't think Tiger into KUL will make AirAsia very happy as they would have to share the LCCT with Tiger Airways

Is there any incentive to operate in the KUL LCCT? I've visited the premise three times, and it was a chaotic mess every time, with the airconditioning not working properly and the washrooms flooded. KLIA's main terminal is much nicer and underused, and Tiger should be able to get the benefits and incentives offered to new carriers starting operations into KUL if and when it gets the rights to fly there.

That being said, it seems like Air Asia is regarding the LCCT as its own, which was not the initial idea of the set up, I guess. Whoever came up with the idea to build the LCCT must have been thinking about attracting some new carriers as well. So if Tiger, or Nok Air or whichever LCC would want to start operations into KUL, I guess they should be granted access to the LCCT.


User currently offlineKEno From Malaysia, joined Feb 2004, 1842 posts, RR: 27
Reply 7, posted (8 years 3 weeks 6 days 16 hours ago) and read 3133 times:

The last piece of news that I heard about Malaysia-Singapore open skies policy stated that this would only take place around 2008. Despite all the major changes since Aug 1, I won't get my hopes up that the market will be opened up in the coming year or two. While MH is rigorous in cutting both domestic and international routes, I doubt very much that it's willing to hand over KUL-SIN that easily.

User currently offline9MMAR From Malaysia, joined Jul 2006, 2110 posts, RR: 18
Reply 8, posted (8 years 3 weeks 6 days 15 hours ago) and read 3097 times:

Quoting B742 (Reply 5):
Although I don't think Tiger into KUL will make AirAsia very happy as they would have to share the LCCT with Tiger Airways

But on business point of view, since AK flies to more destinations compared to Tiger, they should be able to lure some Tiger passengers to travel to some of the routes in their network. They are also, IMHO, can offer a better price compared to Tiger should both AK and Tiger are allowed to fly between KUL and SIN. AK will surely put its best fight.
Malaysia Airport Berhad (airport operator) is welcoming more LCC to use KUL's LCCT. AK didn't owned KUL's LCCT. So, shouldn't be any problem for Tiger.


Quoting HB-IWC (Reply 6):
and Tiger should be able to get the benefits and incentives offered to new carriers starting operations into KUL if and when it gets the rights to fly there.

I don't think so as Tiger is an LCC. LCC will be operating from the LCCT, not from the main terminal.


User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4503 posts, RR: 72
Reply 9, posted (8 years 3 weeks 6 days 15 hours ago) and read 3057 times:

Quoting 9MMAR (Reply 8):
I don't think so as Tiger is an LCC. LCC will be operating from the LCCT, not from the main terminal.

Lion Air is an LCC but operates from the main terminal. Tiger could very well do the same. No need to join the Air Asia chaos in the LCCT if a half empty main terminal is available.


User currently offlineVincewy From Taiwan, joined Oct 2005, 767 posts, RR: 1
Reply 10, posted (8 years 3 weeks 6 days 12 hours ago) and read 2960 times:

Why not build a high speed rail linking Changi-downtown Singapore-KLIA-Kuala Lumpur, obviously, it can also extend to the rest of Malaysia, but this will save a lot of oil and airport slots.

User currently offline9MMAR From Malaysia, joined Jul 2006, 2110 posts, RR: 18
Reply 11, posted (8 years 3 weeks 6 days 12 hours ago) and read 2944 times:

Quoting HB-IWC (Reply 9):
Lion Air is an LCC but operates from the main terminal. Tiger could very well do the same. No need to join the Air Asia chaos in the LCCT if a half empty main terminal is available.

Good point. Maybe as long as Tiger can fulfil the requirement to use KUL's main terminal, it shouldn't be a problem. Is GA the only non LCC from Indonesia? Lion Air, Wing Air, Batavia Air are not full service carrier? Batavia serves food onboard, got their own inflight magazine and sell merchandise in the air.


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