It is learnt that the Cabinet gave the nod at its weekly meeting. This decision comes a few days after Singapore's Transport Ministry said that it was keen to see further liberalisation of the air services agreement with Malaysia.
According to sources, Tiger Airways, Singapore’s own budget airline, would also be offered to fly the same route.
“This means that travellers will have a choice of not only one low-cost carrier to Singapore but two. This will surely spark a price war,” an aviation analyst commented.
On average, MAS flies seven shuttle flights a day to Singapore while SIA does it six times daily.
For the shuttle service, which is jointly operated by the two airlines, the price of a one-way ticket is RM167 while an economy non-shuttle one is RM266. Airport tax and surcharges cost RM140.
AirAsia and Tiger Airways are expected to charge about 30% of the non-shuttle fare but will have the usual cheap offers for limited seats. The two low-cost carriers will operate the route between the LCCT at KLIA and the Budget Terminal at Changi Airport.
It was learnt that AirAsia and Tiger Airways would only be allowed to operate the two flights each on off-peak hours. Sources expected the two carriers to start operations in January.
The analyst said the decision would be a big boost to the two airlines as Singapore and Malaysia were two popular international hubs aimed at different markets.
“The cheaper 40-minute flight between KLIA and Changi airports will mean more international passengers stopping in Singapore or Kuala Lumpur to make the extra hop to either place.
“AirAsia will benefit more than Tiger Airways because of the regional connections it already has. Couple that with the coming of AirAsia X, they will be able to even pull long-haul passengers from Singapore,” he added.
AirAsia chief executive officer Datuk Tony Fernandes could not be contacted for comment. AirAsia officials said he had flown to Singapore.
Fernandes had been vocal about the reluctance of the two governments to allow budget airlines to operate between the two countries ahead of the Asean open skies agreement, which will come into force in 2009.
Source : STAR
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