Tuesday, April 21, 2009

Budget airlines benefit as skies begin to open

The decision by Malaysia and Singapore to further liberalise air travel between them is expected to benefit low-cost carriers -- Firefly and AirAsia -- when the new traffic rights take effect in June, sources said.
Under the new agreement, which was announced by the Singapore Transport Ministry on Wednesday, carriers from both countries would operate between Singapore and six new destinations in Malaysia.

The destinations are Ipoh, Kuala Terengganu, Kuantan, Malacca, Sandakan and Tawau, apart from allowing more flights to Penang, Langkawi, Kuching and Kota Kinabalu.

So far, the Malaysian government has not decided which airline will get to fly the new destinations.

Aviation observers said the existing local low-cost carriers -- Firefly and AirAsia -- would likely be given the routes.
"Firefly is likely to be given permission to fly the Singapore-Ipoh, Singapore-Terengganu, Singapore-Malacca and Singapore-Kuantan and the Singapore-Penang route, which are already served by other airlines."

He said Firefly, however, would probably not get the Singapore-Tawau and Singapore-Sandakan routes as its turbo-prop ATR-72 aircraft was not suitable for long-distance flights.

The source said AirAsia would also likely pick up most of the six routes.

However, he said, it would be up to the Malaysian government to decide on the frequencies and the airline, or airlines, to fly or share the new routes.

Both airlines had applied to the Transport Ministry for permission to fly the new routes, he said.

Industry sources said Firefly officials recently met with the Civil Aviation Authority of Singapore. It is believed that Firefly planned to use Changi Budget terminal as its base if it were offered the routes.

Wednesday's decision by the two countries to lift air restrictions was expected to benefit travellers and further boost the economies of both countries, which started after several rounds of liberalisation last year.

In February, Tiger Airways, Jetstar Asia and AirAsia were given the green light to operate a limited number of Singapore-Kuala Lumpur services.

All the restrictions on the route would be lifted in December.

In November last year, the two governments also opened up the Singapore-Sabah and Sarawak sector, allowing flights from Singapore to Kuching, Miri and Kota Kinabalu and vice-versa.

Source : NST
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