Monday, February 12, 2007

Singapore, Malaysia to work to fully liberalize air route by end-2008, city-state says

Singapore and Malaysia will work toward opening the lucrative route between Kuala Lumpur and the city-state to full competition among the two countries' airlines by the end of 2008, Singapore's transport ministry said.

The agreement followed a meeting between Transport Minister Raymond Lim and his Malaysian counterpart, Chan Kong Choy, on the sidelines of a Bangkok gathering of Southeast Asian transport ministers on Thursday, a statement posted on the ministry's Web site said.

Separately, Lim also urged the Association of Southeast Asian Nations, or ASEAN, to open routes between their capitals by December, a year earlier than the end-2008 deadline.

"We should aim to bring this forward-looking initiative into reality by the end of this year and seize this opportunity to demonstrate to the international aviation community ASEAN's resolve to transform its plans into concrete deliverables," Lim was quoted as saying in the text of his speech.

ASEAN has agreed that in 2008, all regional airlines can operate unlimited services on routes between their capital cities, which will be extended to other cities in the 10 countries by 2010.

Officials from Malaysia and Singapore will meet next month to conclude a new air services agreement, the city-state said.

The two ministers also said bilateral aviation talks should include other Malaysian points outside of Kuala Lumpur, the country's largest city, the statement said.

A 34-year-old air services agreement between the two countries has ensured that
only flag carriers Malaysia Airlines and Singapore Airlines fly the highly
protected route, operating more than 200 flights a week between the two cities.
If the air corridor is opened up, it would vastly benefit Singapore's budget airline Tiger Airways and Malaysia's cut price carrier AirAsia, which have both been asking for the right to fly the route, Asia's fourth busiest.

At present, AirAsia only flies between Kuala Lumpur and the southern Malaysian city of Johor, located only a few kilometers (miles) from Singapore. The two cities are separated by the narrow Johor Strait.

Malaysia Airlines has said it is not in favor of opening the route before 2008 as it would jeopardize its business turnaround plan. But Singapore has said it is ready to expand its air services agreement to increase the connectivity between Kuala Lumpur and Singapore.

Source : IHT
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