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Malaysiakini Report:

MAS 'disappointed' over end of KL-S'pore monopoly
Oct 26, 07 3:44am

Malaysia Airlines said today it was disappointed over the decision to allow budget airlines to operate the lucrative Kuala Lumpur-Singapore route, breaking the national carriers' stranglehold.

"Whilst we are all for fair competition and we believe in the concept of open skies, we are disappointed that the Kuala Lumpur-Singapore route will be prematurely opened to limited flights," CEO Idris Jala said in a statement.

Malaysian Prime Minister Abdullah Ahmad Badawi said yesterday that pioneering low-cost carrier AirAsia had won its long battle to operate the route which for 35 years has been monopolised by Malaysia Airlines and Singapore Airlines.

BirdTalk comment:

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I applaud the decision by the cabinet to loosen the stranglehold of MAS and Singapore airlines for KL-Singapore sector. Both MAS and Singapore airlines have benefited from this monopoly for too long and I am sure regular travellers who have being paying astronomical rates for the 30 minutes ride would more than welcome this decision. However, I urge the government of Malaysia to opening this sector altogether instead of limiting it to just 2 flights per day.

Over the years, Sepang has lost out significantly to Singapore Changi as the regional airline hub. Most travellers have chosen Changi as the preferred destination and transit point due to the ease of flight connection and the lure of Changi airport as a shopping and leisure complex instead of just an airport. Annually, Changi airport handles over 35 million passengers/200,000 flights serviced by over 80 airlines catering for 185cities/58 countries of which more than 60% are transit passengers. On the other hand, KLIA handles 25 million passengers/180,000 flights serviced by about 40 airlines with more than half of KLIA flights and passengers are domestic and less than 20% transit passengers.

The government of Malaysia should not be focusing on protecting on what we have but instead of the opportunity available in capturing a larger share of the international travellers market. We should not be protecting the 25 million passengers, least of all, our under-performing national carrier or our booming “Asian” carrier Air Asia, but instead targeting 50 million passengers for the prosperity of our National carrier, Budget Airlines, KLIA, airline support industries, tourism and regional business hub. This growth can be achieved if KLIA can offer international travellers better reasons why KLIA should be the preferred regional destination or transit point. We can start by offering the basic pre-requisite most travellers seek, the basic convenience of flight connections and competitive incidental cost. This would certainly a worthwhile consideration for most travellers to re-evaluate their options. More travellers’ preference to use KLIA means more passenger loads, more airlines, more destinations and country covered.

If the government of Malaysia intend to establish KLIA as a truly international and domestic air travel hub, then the government ought to seriously be capitalising on the booming regional budget airline industry. This can only be achieved if the government subscribe to total open sky policy and provide more attractive incentives, support and facilities for more budget airlines to be based in KLIA. With more budget airlines servicing the region, local and international traffic will increase. Therefore, in retrospective, removing protective measures such as protecting lucrative routes or granting more licences for more budget airline will indirectly lead to greater prosperity of our national carrier airlines, the budget airline industry, KLIA, airline support industries, tourism and business regional hub.

Malaysia Airlines should not be disappointed over the decision to allow budget airlines to operate the lucrative Kuala Lumpur-Singapore route, breaking the national carriers' stranglehold. Instead, MAS should capitalise on the opportunity by re-focusing its business strategy to be an exclusive national carrier and re-directing its resources to attract more international travellers flying to or via KLIA. Over 3 decades of protectionism is already excessive. The government should not forgo it’s aspiration by continue to provide any form of protection for the national carrier and local budget airline Air-Asia. Instead, it should all be removed immediately for the future of the country as a whole.