KL-Singapore Route: Time for some Budget Airline action??

[babystan03]

Business Times - 02 Aug 2006

AirAsia proposes to fly on KL-S'pore route

Route is currently served by MASand SIA almost as a duopoly

By VEN SREENIVASAN

(SINGAPORE) Flights from Changi to Kuala Lumpur at $9.99? That could happen if AirAsia is successful in its bid to get into the route.

The Malaysian budget carrier has submitted to the Malaysian government a list of destinations it wants to fly, including Singapore. Analysts say that AirAsia, which is already Asia's largest low-cost carrier, is particularly keen to start services between Kuala Lumpur and Singapore.

'They have apparently submitted a proposal to fly from their Low Cost Terminal at Sepang International Airport to the Budget Terminal at Changi,' Shukor Yusof of S&P Equities told BT.

'And if they are successful, it would have to be a quid pro quo, with one of Singapore's budget carriers, most likely to be Tiger Airways, also being allowed into the route,' he added.

Rights to fly international destinations come under the purview of the national government, which then has to engage in bilateral negotiations with other countries for air rights and slots.

But a spokesperson for the Civil Aviation Authority of Singapore said her organisation had not received any official notification on the issue. But if AirAsia, and Tiger Airways, get into the Kuala Lumpur-Singapore route, they would give Malaysia Airlines (MAS) and Singapore Airlines a run for their money.

Currently, the two national flag carriers service this 30-minute hop almost as a duopoly, controlling 85 per cent of more than 200 flights per week between the two destinations.

The remainder is served by carriers such as AirLanka, Air India and Japan Airlines, which exercise their Fifth Freedom rights to pick up passengers at one foreign point and put them down in another foreign point as part of a continuous operation also serving the airline's homeland.

But having just two big players has meant high fares: a round trip between Changi and Sepang costs well over S$300, double the fare between Changi and Bangkok's Don Muang via a low-cost carrier.

In fact, as industry insiders point out, it is actually cheaper to fly from Singapore to Kuala Lumpur via Bangkok with a low-cost carrier.

Analysts have cited this as an anachronism at a time when the regional aviation scene is undergoing rapid changes.

The latest move by Air Asia comes just months after a major restructuring of domestic routes in Malaysia, where the government carved up the market between loss-making MAS and Asia's biggest budget carrier. Its attempt to fly into Singapore also comes more than two years after it failed to set up a Singapore associate, then failed to secure rights for its its Indonesian associate Indonesian AirAsia (formerly known as Ewair) to get landing rights in Changi.

But Thai AirAsia - its 49 per cent owned Thai unit - flies daily between Bangkok and Singapore.

Malaysian media reports suggest AirAsia could generate some RM200 million (S$86 million) from the Kuala Lumpur-Singapore route, representing a 20 per cent increase over its current RM1 billion revenue.

Meanwhile, it is no secret that Tiger Airways and Jetstar would also love to get a slice of the huge Kuala Lumpur-Singapore market.

Not long ago, Malaysian media reports suggested that Tiger Airways' chief executive Tony Davis had been scouting around for potential partners in that country in order to set up a cross-border associate which would enable the budget carrier to sidestep existing air rights restrictions.

But while Singapore has seemed amenable to reviewing the decades-old Air Services Agreement between the two countries, which effectively limits competition on the Kuala Lumpur-Singapore route, Malaysia has been somewhat more reluctant.

Industry insiders attribute this to objections from MAS, for whom the shuttle flights are a very profitable venture. But with Asean edging towards open skies by 2015, liberalisation of the existing Malaysia-Singapore air fights regime seems inevitable.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

[blizzardtweaker]

SG would probably nt agree....
SG want tiger or jetstar (more tiger since its more sg) to fly the route.
m;sia would want airasia to fly the route...
ary if i'm pessimistic, but i dont really see an agreement between the 2 sides in the near future

[RafflesCity]

it would most likely be bilateral

[babystan03]

This story was printed from TODAYonline

Cheap flights to KL in the air?

Thursday • August 3, 2006

Tor Ching Li
chingli@newstoday.com.sg

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.

[babystan03]

Aug 5, 2006
Air-pact changes don't need SIA, MAS approval

THE article, 'Budget airlines push to open S'pore-KL route' (ST, Aug 3), mentioned that 'talks on air rights are carried out at the government level and in the case of Singapore-Malaysia negotiations, it is believed that a clause in the air-service agreement between the two countries prevents any changes being made unless they are approved by Singapore Airlines (SIA) and Malaysia Airlines (MAS)'.

We would like to clarify that the Singapore-Malaysia Air Services Agreement (ASA) does not contain any clause which requires changes to the ASA to be approved by SIA and MAS. The Singapore-Malaysia ASA is a government-to-government agreement. Any changes to the Singapore-Malaysia ASA are to be negotiated and mutually agreed upon by both governments.

Singapore welcomes more Singapore and Malaysian carriers to operate services and improve air links between Singapore and Malaysia. However, the Singapore-Malaysia ASA was last expanded in 1980 and since then all air -traffic rights for the Singapore-Kuala Lumpur sector have been used up. Consequently, new Singapore and Malaysian carriers are unable to enter the market. Singapore would like to expand the ASA to allow more carriers and flights by both sides, but this requires the agreement of the Malaysian government. Singapore looks forward to meeting Malaysia to discuss the expansion of the ASA as soon as Malaysia is ready.

Lee Ark Boon
Director, Air Transport Division
Ministry of Transport

EXPANSION OF AGREEMENT

Singapore looks forward to meeting Malaysia to discuss the expansion` of the Air Services Agreement as soon as Malaysia is ready.

Copyright © 2006 Singapore Press Holdings. All rights reserved.

[babystan03]

Aug 6, 2006
KL sets up panel to study opening of S'pore air route

KUALA LUMPUR - MALAYSIA'S Transport Ministry has set up a committee to study the opening of the Kuala Lumpur-Singapore air route to budget airlines of the two countries.

Minister Chan Kong Choy said the committee was set up last week under Secretary-General Muhd Safaruddin Muhd Sidek and is to come up with recommendations in the next few weeks.

Datuk Seri Chan told reporters this when asked about the matter after attending a seminar here yesterday.

Malaysia's AirAsia and Singapore's Tiger Airways have indicated interest in flying the route which is one of Asia's most lucrative and the fourth-busiest route.

There are more than 200 flights a week on the route operated by Malaysia Airlines and Singapore Airlines in a virtual monopoly under a 34-year-old air services agreement between the two countries. -- Bernama

Copyright © 2006 Singapore Press Holdings. All rights reserved.

[Charging Bull]

KL-Singapore route will open up latest by 2008


马考虑让马新廉航提早互飞

--------------------------------------------------------------------------------



　　（吉隆坡综合讯）马来西亚交通部长陈广才昨天说，政府考虑提早落实吉隆坡至新加坡航空开放政策，让两国廉价航空公司提早互飞。

　　他说，他说，交通部已成立一个以该部秘书长为首的委员会，探讨提早落实这项政策的可能性。如果这项政策落实，那么，亚洲航空以及新加坡虎航的班机，都将能往返吉隆坡及新加坡。

　　他也说，如果没有提早开放，到了2008年，亚航和虎航的班机自然可以往来吉隆坡及新加坡。

　　陈广才是在出席一项研讨会后受询时说，亚洲航空之前确已要求政府让该公司班机飞往新加坡，而他相信虎航也有向新加坡政府提出在吉隆坡设立办事处的要求。

　　他说，由于有这方面的要求，因此，上述委员会就探讨提早落实航空开放政策，而不用等到2008年才实行。

　　他说，该委员会也在探讨提早落实亚细安航空开放政策的可能性。

　　根据亚细安国家之前达致的共识，到了2008年，各成员国航空公司的班机可以飞到各成员国的首都；到了2010年，则将增加多一个降落地点，即首都+1方案；到2015年就全面开放。

　　他说，委员会需要数星期探讨，研究范围包括提早开放后所将造成的影响等。

[Charging Bull]

新山议员：子弹火车和廉航若直通新加坡
　　柔南经济区计划将失败告终

--------------------------------------------------------------------------------



　　（新山讯）马来西亚国会公共账目委员会主席沙里尔声称，一旦新加坡批准杨忠礼机构提呈的吉隆坡直透新加坡的“子弹火车”计划，并允许廉价航空亚洲航空（AirAsia）开辟新航线及取得降陆权，新加坡随时可破坏柔南大都会经济区计划，令计划以失败告终。

　　沙里尔也是新山国会议员。他说，有意承建子弹火车计划的杨忠礼机构，以及亚洲航空都属于私人机构，在商言商，如果新加坡同意让子弹火车在新加坡作为终站，杨忠礼机构自然不会选择子弹火车以新山为终站。

　　“同样的，如果让亚洲航空在新加坡取得了降陆权，亚洲航空也自然会放弃新山士乃国际机场而选择新加坡樟宜机场，新加坡可以随时破坏我们的柔南大都会经济区发展计划。”

　　《星洲日报》报道，他昨日在新山乌达新镇为一项步行活动主持开幕后，针对柔佛州一些民众及业者希望隆新子弹火车计划能在新山停留，以及要求亚航实践之前将士乃列为南马区航空终站的承诺，发表谈话。

　　他说：“亚航为一家私营公司，以盈利为重不足为奇，我们没有理由要求该公司履行社会义务及满足人民的要求，去经营一些亏损的航线，因此亚航会基于利益以及商业策略考量，最终选择新加坡，而在商业现实环境下，我们不能以此责怪亚航。

　　提到隆新子弹火车计划，沙里尔说，如果子弹火车计划落实，新山将免不了为配合子弹火车计划建造所需的设施，而面对征用地段的问题，届时必将掀起另一番争议，民间也会对此不满。

　　他说，一旦隆新火车计划落实，新山无疑成了“过境城市”。

[babystan03]

Originally Posted by Charging Bull

KL-Singapore route will open up latest by 2008


马考虑让马新廉航提早互飞

--------------------------------------------------------------------------------



　　(吉隆坡综合讯)马来西亚交通部长陈广才昨天说,政府考虑提早落实吉隆坡至新加坡航空开放政策,让两国廉价航空公司提早互飞。

　　他说,他说,交通部已成立一个以该部秘书长为首的委员会,探讨提早落实这项政策的可能性。如果这项政策落实,那么,亚洲航空以及新加坡虎航的班机,都将能往返吉隆坡及新加坡。

　　他也说,如果没有提早开放,到了2008年,亚航和虎航的班机自然可以往来吉隆坡及新加坡。

　　陈广才是在出席一项研讨会后受询时说,亚洲航空之前确已要求政府让该公司班机飞往新加坡,而他相信虎航也有向新加坡政府提出在吉隆坡设立办事处的要求。

　　他说,由于有这方面的要求,因此,上述委员会就探讨提早落实航空开放政策,而不用等到2008年才实行。

　　他说,该委员会也在探讨提早落实亚细安航空开放政策的可能性。

　　根据亚细安国家之前达致的共识,到了2008年,各成员国航空公司的班机可以飞到各成员国的首都;到了2010年,则将增加多一个降落地点,即首都+1方案;到2015年就全面开放。

　　他说,委员会需要数星期探讨,研究范围包括提早开放后所将造成的影响等。

Good news.....

[babystan03]

Aug 21, 2006
Major dilemma over freeing up of KL-S'pore air route

By Malaysia Correspondent, Leslie Lopez

Open skies would benefit consumers, tourism and AirAsia

Struggling Malaysian national carrier MAS would be hit hard

IN KUALA LUMPUR - MALAYSIA'S ambitious airline sector rationalisation is presenting Prime Minister Abdullah Badawi's government with a tough policy dilemma: How far does it persist with protecting the country's struggling national carrier Malaysia Airlines, or MAS.

This latest policy poser for Datuk Seri Abdullah's government is a result of an aggressive push by upstart low-cost carrier AirAsia, which wants Malaysia to scrap a decades-long air services pact that essentially limits flight travel between Kuala Lumpur and Singapore to two operators - MAS and Singapore Airlines.

For the amount of travel time, the KL-Singapore sector ranks as one of the most expensive in the world and, as a result, this roughly 30-minute hop represents a huge source of revenue for both SIA and MAS.

AirAsia's controlling shareholder Tony Fernandes wants a piece of the action.

Under Malaysia's airline rationalisation plan, which was implemented this month, the government carved up the country's domestic airline business by allowing AirAsia to operate 89 of the country's 118 local routes, leaving MAS to concentrate on its international operations and another core 22 local routes.

This was part of a plan to stem the financial losses suffered by MAS which reported a loss of RM1.3 billion (S$570 million) for financial year 2005.

But the lucrative Kuala Lumpur-Singapore sector was not part of the industry overhaul, and Mr Fernandes, who is known for his aggressive business tactics, wants the Malaysian government to speed up the liberalisation of the sector.

In a special presentation to senior Cabinet ministers recently, the businessman asked the government to dismantle the duopoly over the KL-Singapore route, which he maintains will benefit the country economically, said people familiar with the meeting.

Mr Fernandes declined comment for this article, but several airline sector analysts agree with his business pitch.

They say that an open-skies policy will benefit consumers with cheaper air fares, step up economic linkages between the two countries and boost Malaysia's tourism sector.

'Opening the sector could be a little negative for MAS, but not necessarily for the country. National interests should override corporate considerations,' said analyst Gan Kim Khoon of AmSecurities, a unit of Malaysian financial group AmBank.

But several Malaysian government officials are sceptical about opening the country's airspace to competition.

They contend that the country must proceed cautiously with any open-skies plan because the airline business remains fraught with risks stemming from the volatility of global fuel prices.

What is more, the government officials note, the open-skies policy pursued by AirAsia would benefit Singapore's private budget carriers at the expense of state-controlled MAS, which is, they say, at a crucial point in its corporate restructuring.

'Any free-skies plan has to be put on hold. The KL-Singapore route is the most profitable route for MAS, and the airline needs it to bulk up before it can face competition,' said a senior Malaysian government official.

The policy dilemma over the airline rationalisation plan underscores the tough economic decisions Datuk Seri Abdullah's government faces as it tries to inject more competition into sectors of the economy that have survived because of protection.

ljlopez@sph.com.sg

VITAL SECTOR

'Any free-skies plan has to be put on hold. The KL-Singapore route is the most profitable route for MAS, and the airline needs it to bulk up before it can face competition.'
A SENIOR MALAYSIAN GOVERNMENT OFFICIAL

Other national priorities: Proton and fast train

MALAYSIA'S national car Proton, long protected from competition by high tariffs and taxes, has seen its dominant market share slide rapidly as a result of competition from global carmakers which are assembling their vehicles in Malaysia at very competitive prices.

As Proton struggles to remain profitable, the government is seriously considering merging Proton with a foreign carmaker so it can compete at home and abroad.

Such a move, however, could prove politically explosive, especially at a time when Prime Minister Abdullah Badawi is caught in an increasing bitter public spat with his predecessor Mahathir Mohamad over policies, including the current government's alleged lack of support for projects such as Proton.

Like Proton, several government officials say that the further liberalisation of the airline sector could stumble because of other national priorities. Among them, Malaysia's growing interest in the construction of a fast train service connecting Kuala Lumpur and Singapore.

Datuk Seri Abdullah's administration has already ordered a study to be carried out on the viability of a new rail system, which some bankers say could cost as much as RM8 billion (S$3.4 billion) to build.

Proponents say that limits to competition over air travel between the two cities may be needed to make any fast-train project economically viable.

But several private economists and bankers disagree.

They note that if Malaysia is to commit huge amount of funds to an infrastructure undertaking such as a fast-train system, the government must make sure the project will be viable in an environment of unfettered competition.

'Otherwise, it (the fast-train) will become a white elephant,' said a Malaysian investment banker who advises companies on infrastructure projects.

LESLIE LOPEZ

Copyright © 2006 Singapore Press Holdings. All rights reserved.

[babystan03]

Business Times - 31 Aug 2006

AirAsia close to flying to S'pore: CEO

Budget carrier posts 143% jump in Q4 earnings as sales rise 21%

(KUALA LUMPUR) Malaysia's AirAsia is close to flying to Singapore, its chief executive Tony Fernandes said on Tuesday, after the budget carrier reported a 143 per cent on-year surge in net profit in the quarter through June.

'Singapore is very much in our picture. We are not too far away from flying to Singapore,' Mr Fernandes said in a conference call on the airline's earnings.

He said he would be meeting with Singapore Transport Minister Raymond Lim on Sept 5 but declined to elaborate.

Mr Lim will be in the Malaysian capital from Sept 4 to 5 on an official visit.

South-east Asia's biggest and only publicly listed low-cost carrier, previously failed to secure landing rights in Singapore.

It then accused Singapore of blocking it from servicing the lucrative Kuala Lumpur-Singapore route to protect its own Singapore Airlines.

The airline said it posted a net profit of RM39.1 million (S$16.7 million) in the fiscal fourth quarter to June, up from RM16.1 million in the same period a year earlier.

Sales in the quarter rose 21 per cent on-year to RM241.7 million, it said.

It attributed the surge in earnings to a 5.7 per cent increase in average fares and a higher load factor of 83 per cent, compared with 80 per cent in the previous quarter. For the full year that ended June 30, AirAsia said its net profit rose 14 per cent to RM126.9 million, mitigated partially by higher depreciation and finance charges after it took delivery of new aircraft.

AirAsia, which has about 40 planes now and has ordered 100 Airbus 320 planes for its fleet expansion, said it has received seven of the new aircraft up through the end of June.

The carrier said it has net tax incentives of RM11.4 million for the fiscal year just ended for the purchase of new aircraft, compared with a tax charge of RM14.3 million a year earlier.

In the 2007 fiscal year, AirAsia said it faces challenges from increased competition, lower yields due to aggressive promotional fares and unpredictability of fuel prices.

The board does not 'anticipate fuel prices falling significantly and is of the view that they will remain at high levels in the short-term', it said.

The airline is not covering any of its fuel requirements with financial derivatives for the year ending June 2007, Mr Fernandes said.

'We are comfortable with where we are now,' he said, adding that the airline may take a short-term hedge. AirAsia covered all of its fuel needs for the year with West Texas Intermediate futures on crude oil.

The airline paid RM323.8 million for jet kerosene in the year ended June, 21 per cent more than a year earlier, it said in a presentation posted on its website. Despite the volatile industry, AirAsia said it remains 'positive on the long-term business outlook'.

AirAsia shares rose 2 sen, or 1.5 per cent, to RM1.35 at the 5 pm close yesterday on the Kuala Lumpur Stock Exchange. - AP

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

[babystan03]

Sep 4, 2006
Ministers may discuss S'pore-KL air route
Raymond Lim and KL counterpart likely to talk about opening up sector

By Aviation Correspondent, Karamjit Kaur

TRANSPORT Minister Raymond Lim is likely to discuss the Singapore-KL air route with his Malaysian counterpart Chan Kong Choy when they meet in Kuala Lumpur today, as pressure builds for the lucrative sector to be opened up.

It is the first time transport ministers on both sides are meeting since Malaysia recently raised hopes that more low-cost and alternative airlines could fly between the two capital cities.

Mr Chan told reporters a month ago that his ministry had set up a committee to look into the matter. It will make its recommendations in the next few weeks.

During Mr Lim's two-day working visit - his first to Malaysia - he will also wear his hat as the Second Minister for Foreign Affairs and call on Malaysia's Foreign Affairs Minister, Datuk Seri Syed Hamid Albar, and the Second Minister of Finance, Tan Sri Nor Mohd Yakcop.

But observers expect that discussions on air links and especially Singapore-KL flights will take centre stage.

The route is now dominated by Singapore Airlines (SIA) and Malaysia Airlines (MAS), which together control 85 per cent of more than 200 flights a week between the two destinations. A round- trip fare, excluding taxes and other surcharges, comes to more than $300.

The Singapore-Malaysia air service agreement was last expanded in 1980 and since then, all air traffic rights between Singapore and KL have been used up.

The budget airlines are eyeing the 30-minute route.

AirAsia chief Tony Fernandes, who is to meet Mr Lim tomorrow, is upbeat about prospects for liberalisation.

He said last week, after the budget carrier reported a 143 per cent year-on-year surge in net profit between April and June: 'Singapore is very much in our picture. We are not too far away from flying to Singapore.'

Singapore's Tiger Airways is also pushing for access to the route.

Malaysia's Tourism Minister, Datuk Seri Tengku Adnan Tengku Mansor, supports the move for liberalisation, which will improve connectivity and boost tourism between the two countries.

Travellers are keeping their fingers crossed that more flights - especially if budget carriers come in - will bring down fares, as they have in other markets like Bangkok and Jakarta.

A round trip to Bangkok with all taxes in can cost under $200 today. A few years ago, it was three times as much.

Can Singapore-KL travellers hope for the same drop in fares?

The wheels have started to turn, but analysts expect the two national carriers to resist. This is especially so for loss-making MAS, which earns an estimated RM120 million (S$51.5 million) from the Singapore-KL route alone - one of the few profitable sectors it operates.

But there is hope. Under a recent revamp of the country's domestic airline business, the Malaysian government gave AirAsia the green light to operate 89 out of 118 local routes, leaving MAS to concentrate on its international operations and another 22 local routes.

This is part of a turnaround plan to streamline MAS' operations and bring it back to profitability.

Although the lucrative Singapore-KL sector was excluded from that rationalisation exercise, there has never been a better time for budget carriers to push their case, says analyst Shukor Yusof of Standard & Poor's Equity Research.

karam@sph.com.sg

Copyright © 2006 Singapore Press Holdings. All rights reserved.

[babystan03]

04 September 2006
Singapore and Malaysia welcome opening up of two-way air routes
By Channel NewsAsia's Malaysia Correspondent Melissa Goh

Malaysia and Singapore have both welcomed the imminent opening up of two-way air routes, seeing mutual benefits in such a development.

Singapore's Transport Minister Raymond Lim met his Malaysian counterpart Chan Kong Choy for the first time on Monday in Putrajaya.

During Mr Lim's visit to Malaysia, he also spoke about further discussions between the two countries on ways to strengthen air, land and sea links.

He told Channel NewsAsia that Singapore is ready for bilateral talks with its northern neighbour on freeing up air links.

Raymond Lim, Singapore's Transport Minister, Second Minister for Foreign Affairs, said: "We're ready to discuss opening up the KL-Singapore sector. It's just a matter of waiting for their proposal. It's a timely thing to do - the last time we had an expansion of air services agreement was in the 1980s, that's more than a quarter of ago. Such a move to open up the KL-Singapore air sector would benefit both countries."

Malaysia set up a committee last month to look into the feasibility of bringing forward an Open Sky Agreement with Singapore ahead of the deadline set by ASEAN, of which both are members.

Under ASEAN's Open Sky Agreement, airlines of member countries can operate unlimited flights between their capital cities by 2008.

Malaysia's Transport Minister said the committee's report, which includes the impact on the national carrier Malaysian Airlines, will be ready in a few days.

Chan Kong Choy, Malaysia's Transport Minister, said: "We believe the further liberalisation of aviation links actually benefits the two countries in tourism, trade and investment. Whether you like it or not, according to this ASEAN aviation roadmap, we are going to open up."

Budget airlines from both sides - Malaysia's AirAsia and Singapore's Tiger Airways - have indicated interest in flying the busy Kuala Lumpur-Singapore air route, which is one of most lucrative in Asia.

Consumers generally welcome the liberalisation of the Kuala Lumpur-Singapore air route that is currently monopolised by both countries' national carriers.

They hope that this will help to bring down the existing air fare that costs over US$240 for a round trip.

MAS and SIA currently operate more than 200 flights per week between Kuala Lumpur and Singapore under a 34-year-old bilateral air services agreement. - CNA/ch

[babystan03]

This story was printed from TODAYonline

All on board air bus to KL, finally?

Liberalising shuttle route will shift focus to better flight frequencies, hassle-free experience for travellers Liang Dingzi • News Comment

Tuesday • September 5, 2006

IDEALLY, air travellers between Singapore and Kuala Lumpur (KL) should be able to hop on a plane as easily as they would board a bus or a train. Without compromising security requirements, the process should be hassle-free — from buying a ticket to exiting the airport terminal upon arrival.

The passengers should not be subjected to elaborate check-in procedures. In this respect, the simplified self-check-in introduced by Singapore Airlines (SIA) at Changi Airport (though not just for shuttle service passengers) is a move in the right direction.

For shuttle flights, where functionality is more relevant than sophistication, there is room for further simplification.

The essence of a shuttle service is not only the integrity of its schedule in terms of regularity and punctuality, but also adequate flight frequencies. The waiting time between flights should not cause customers, in particular the time-conscious businessmen, to get flustered.

For a start, hourly intervals will add some half-dozen more flights daily between 6am and midnight. In time, half-hourly intervals during peak hours could become the norm.

All this may well be a dream come true for the frequent shuttle flyers, now that Singapore and KL are considering increasing the frequency of flights between the two destinations and allowing the budget carriers — Air Asia and Tiger Airways have been suggested — to also fly the lucrative route. These carriers may be better positioned for a modus operandi that favours smaller capacity but higher frequency.

No two capital cities in close proximity are more complementary than Singapore and KL, and a shuttle connection true to its name is long overdue.

There has been speculation that the national carriers may object to losing their monopoly for this sector. The Singapore party has clarified that the issue is one of adding frequencies, and that the concurrence of the national carrier — in this case, SIA — on awarding any additional rights to other competitors is not a pre-condition. On the other hand, Malaysia Airlines' (MAS) reported loss of RM1.3 billion ($557 million) in fiscal year 2005 could prove a point of contention.

Other, likely smaller, airlines may be able to fill the gaps left by SIA and MAS in an expanded schedule. Even if the incumbent airlines are able to operate all the available slots, the argument for increased competition still holds, in the consumer's interest.

The fares for the other routes have become more competitive in recent years, but the Singapore-KL sector continues to be protected.

Nor has this lucrative route been spared MAS' hike this week in fuel surcharge on several international routes, to recoup its losses.

More significantly, liberalisation will force a re-branding of the shuttle connection to focus more on costs and passenger's convenience than on image and frills.

SIA and MAS cannot afford to ignore the suitability of the low-cost model of the budget airlines, which are not constrained by the unwieldy legacies and trappings of full-service airlines. As it is now, the short 30- to 45-minute rides operated by the two national carriers are almost frill-less.

Considering the schedule frequency, there is even more justification for a dedicated airport facility to cater to shuttle handling than the need for a budget terminal.

SIA and MAS may be concerned about connections between their shuttle services and long-haul flights, but transiting across terminals is not uncommon at most major international airports.

The next best thing is for the airlines and the airport authorities to work on making the transfer less cumbersome. In any case, the budget carriers carrying passengers who connect to other airlines are already facing this challenge.

The full benefits of the hassle-free process from point to point, however, can only be realised if both Changi and KL International Airport maintain similar facilities and procedures. It will defeat the purpose if the passenger has to confront kinks at one end.

In the political context, this proffers an opportunity for both Singapore and Malaysia to demonstrate regional cooperation and reap the benefits of fuelling the growth of what may become complementary hubs, ahead of the proposed common Asean aviation market.

The writer, a management consultant,

is retired from the aviation industry.

What's your view? Email us at

news@newstoday.com.sg

Copyright MediaCorp Press Ltd. All rights reserved.

[RafflesCity]

it will be great of it can be implemented soon

currently because of the air arrangements, I find flying to Bangkok for a getaway more attractive and value-for-money than KL....

[babystan03]

Originally Posted by RafflesCity

it will be great of it can be implemented soon

currently because of the air arrangements, I find flying to Bangkok for a getaway more attractive and value-for-money than KL....

Yes....if this is implemented, KL would be more competitive than Bangkok since it would be slightly cheaper (airfare) and only takes one hour.....

I can just fly to KL and look for Szehoong for tea during weekend.....

[RafflesCity]

exactly...I can fly there...snap pics, stay the weekend and jet-back...well hope it is soon

[babystan03]

Originally Posted by RafflesCity

exactly...I can fly there...snap pics, stay the weekend and jet-back...well hope it is soon

Yeah Szehoong is "waiting" to host you........I went KL about 3 times but I haven't snap any picture of Petronas and Putrajaya at night....

[RafflesCity]

yer I know...he's asked me many times to go....even my colleagues asked me but I'm just so lazy...and I dont hate KL or anything

[babystan03]

Originally Posted by RafflesCity

yer I know...he's asked me many times to go....even my colleagues asked me but I'm just so lazy...and I dont hate KL or anything

I think it's the laziness....

I was also quite bored by taking a 5 hour bus.....but it turn out to be the best option for now.....sigh....