This story was printed from TODAYonline
Cheap flights to KL
in the air?
Thursday • August 3, 2006
Tor Ching Li
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.