Asean Open Skies

[Robert 0]

Does the open skies agreement come into play from the start of 2009 or is it the year after?

 

So what changes can we expect?

 

Budget airlines expanding their route network immensely - thats a no brainer

 

SQ flying KUL-SIN-Europe or Europe-SIN-KUL destinations?

 

Many foreign airlines trying to win the Malaysian domestic market?

 

MAS trying on the offensive in other domestic markets?

 

Of course there are many more things that could happen but as a paying customer I feel that this is going to be a very good thing for us paying customers.

 

I’m not sure that the full service airlines are best pleased especially with the current fuel prices.

 

So what are latest thoughts and predictions?

 

[KC Sim 2]

The first phase ofthe ASEAN Open Skies Agreement kicks in on 1 January 2009 when airlines from member countries will be able to operate without frequency and capacity restrictions between the capital cities.

 

It is my understanding that this however is restricted to the home city of that airline and another ASEAN capital city, but not between two foreign capital cities. This means therefore that MAS can operate any number of flights from KUL to SIN but not beyond SIN to CGK.

 

One could expect LCCs to be the first to jump on the bandwagon and launch flights between city-pairs such as KUL-SIN, KUL-BKK and perhaps BKK-SGN, SIN-SGN . . . but not likely to happen to more obscure capitals such as Vientiane, Phnom Penh.

 

The next phase of ASEAN Open Skies Agreement will be achieved in 2015 when it will completely open, possibly meaning that the restrictions on frequencies and capacity will be removed for all ASEAN destinations and perhaps for each ASEAN airline to be able to operate between two other ASEAN countries other than its own . . . and maybe even beyond rights.

 

A lot of finer details remain unclear for the second phase . . . I personally think it will not be a full liberalisation vis-a-vis that which exist between two countries (such as the one between SIN and the UK or USA).

 

KC Sim

Edited September 12, 2008 by KC Sim

[dsim 0]

would love to see more liberalisation on this...

[Ryan Soh 3]

would love to see more liberalisation on this...

Honestly, who wouldn't? Under a fully liberalised environment can you imagine the amount of money it would churn indirectly for the other areas of industries?? KA-CHING!!!!!!

[Pieter C. 5]

The first phase ofthe ASEAN Open Skies Agreement kicks in on 1 January 2009 when airlines from member countries will be able to operate without frequency and capacity restrictions between the capital cities.

 

Noticed, Lionair already operating SIN-SGN v.v. with 739 and full traffic-rights

 

[KC Sim 2]

Lion Airlines is operating SIN-SGN-SIN with full fifth-freedom rights granted under the existing bilateral Air Services Agreement between the Republic of Indonesia and the Republic of Singapore.

 

Even when the first phase of the ASEAN Open Skies Agreement comes into operation, it will still need the bilateral agreement to continue with this service. The ASEAN Open Skies Agreement would merely liberalise the CGK-SGN-CGK sectors for Lion Airlines and other Indonesian carriers.

 

KC Sim

[yeadrian 0]

Intense battle for Asean skies - Challenging year shaping up for aviation industry .By B.K. SIDHU

http://biz.thestar.com.my/news/story.asp?file=/2008/11/15/business/2556188

 

PETALING JAYA: Competition is expected to heat up in the region’s aviation industry as airlines gear up for the opening of the sector in Asean capital cities by Jan 1 next year. A hot route will be the once protected KL-Singapore where nearly 10 airlines are going to slug it out for a bigger share of the lucrative market.

 

“We do not expect a big bang for the opening of the Asean capital cities as it is already a vibrant air sector. The real excitement will be on the KL-Singapore route (where competition will be keener on the sector),’’ Standard & Poor’s Equity Research aviation analyst Vincent Ng told StarBiz. Although the KL-Singapore route has been open to limited competition since early this year, additional frequencies of up to 180 new weekly flights can be expected when it opens up earlier on Dec 1. AirAsia, Jetstar, SilkAir and Tiger Airways are expected to join in the fray for passengers on the high-demand route.

 

 

The established carriers plying the route are Malaysia Airlines and Singapore Airlines. Fares will come under pressure as the date draws nearer. Certainly, a very challenging year is shaping up for the aviation industry as the full impact of the global economic downturn spreads. Liberalising the sector means Asean carriers can mount unlimited flights between the capital cities but bilateral arrangements will also need to be hammered out. The opening of the KL-Singapore route is the first leg of the opening of the air sector in Asean which eventually leads up to a unified regional aviation market by 2015.

 

Even MAS’s new carrier, Firefly, is hoping to be part of the action. It already flies to secondary airports in Thailand and Indonesia but what it is eyeing is a slice of the KL-Singapore market.

The carrier is hoping the Government will give it the rights to ply the Subang-Singapore route.

“Many of our customers are asking for it and for us it is about convenience and adding value to our offerings. Allowing us to fly the route will complete the network.

“We have submitted our application and remain hopeful of getting three to four daily flights on the Subang-Singapore route,’’ Firefly Sdn Bhd managing director Eddy Leong said.

While airlines are working out their strategies to take advantage of the Asean Open Skies policy for capital cities, Singapore has already made the first move.

It has launched the ViaSingapore.com website, a one-stop shop offering travellers “best” air-fare deals to go to Singapore and beyond.

It is a proactive step which enhances Changi’s attractiveness as an air hub with its extensive connectivity.

But more importantly, it shows Singapore is moving fast to become the gateway of Asean as the region’s aviation sector opens up.

 

 

I wonder how will MH weather the competition, after all these years of pampering they have to start to walk on their own 2 feet even on home turf. Will the Government delay the open skies agreement (just like the automobile industry)......

Edited March 5, 2011 by Mohd Azizul Ramli

[Naim 6]

Singapore: Open Skies At Last For S'pore-KL

 

Business 2008-12-01 12:45

 

SINGAPORE: More than 70 years after the first Singapore-Kuala Lumpur commercial flight, all restrictions will be lifted on airlines flying between the two cities from Monday (1 Dec).

 

It took five years of lobbying by budget airlines and travellers before the final barriers to open air travel could be dismantled in one of Asia's most restricted air sectors.

 

The big winner in this move to liberalise the sector is the traveller. Liberalisation means choices galore--more carriers, more flights--and lower fares as competition grows.

 

Cracks in the barriers first appeared in February this year, when low-cost carriers Tiger Airways, Jetstar Asia and AirAsia received the all-clear to fly between the two cities--but with a caveat. Only four flights a day were allowed in total.

 

That's set to change. From Monday, there will be up to 14 daily low-cost services. This is on top of the more than 15 full-service flights available, operated mainly by Singapore Airlines (SIA), SilkAir and Malaysia Airlines (MAS).

 

With this big boost in capacity, the Singapore-KL sector will overtake the Singapore-Bangkok and Singapore-Jakarta routes to become the most heavily served route out of Changi Airport, based on the number of flights and seats set to flood the market.

 

According to the Civil Aviation Authority of Singapore (CAAS), there will be 432 flights a week between Singapore and KL from Monday. That's a 120% increase over the figure a year earlier.

 

In contrast, there has been a slight year-on-year drop in the number of flights between Singapore and Jakarta, which is 328, and between Singapore and Bangkok, which is served by 303 flights.

 

Data obtained from Britain-based OAG, which tracks flight bookings and trends, shows that more than 1.4 million seats will be released for the Singapore-KL route from Monday till end-March next year. This is a spike of almost 60% compared with the same four-month period a year ago.

 

The Singapore-Bangkok sector dips to second spot and Singapore-Jakarta to third, with about 1.3 million seats being released in each market.

 

Filling up so many seats on the Singapore-KL route will be tough, several industry players, including MAS, have warned.

 

The liberalisation comes at a time when a global financial meltdown is wreaking havoc on the air travel industry, on a scale not seen since the Sars crisis in 2003.

 

Hit by weak demand for travel, hard-pressed airlines are cutting capacity, dropping routes, parking planes and shedding staff.

 

Still, carriers remain upbeat that the additional capacity being injected into the Singapore-KL sector - mainly by low-cost carriers - will stimulate new demand and, in time, grow the pie for all.

 

According to Ms Kathleen Tan, the regional head of AirAsia's commercial division, six in 10 of its customers are either first-timers or repeat fliers. Its clients also include those who used to fly with full-service airlines as well as bus travellers.

 

Malaysia offers a base of 25 million people for airlines to tap, so liberalisation can only grow the market, she noted.

 

At travel facilitator Abacus International, vice-president for North Asia and content marketing Patrick Lai agreed, adding that the proximity of the two cities, as well as close 'business, personal and cultural relationships, may provide a considerable stimulus for the travel market'.

 

There is no 'one size fits all' strategy, and experts note that different carriers will appeal to different passenger types.

 

SIA and MAS are banking on their international networks and connectivity to reel in customers, as well as a code-share arrangement that allows a traveller holding an SIA ticket, for example, to also fly with MAS, and vice-versa. In code-sharing, a flight operated by one airline is jointly marketed as a flight on other airlines.

 

MAS commercial director Abdul Rashid Khan said that the Singapore-KL route is significant not just as a point-to-point service, but also as a "springboard" for the airline's services out of KL.

 

SIA competes on the basis of its strengths, said spokesman Stephen Forshaw. They include innovative products and service offerings, as well as an extensive network that spans 150 major cities, including code-shares.

 

In the end, the market will decide whether there are too many or too few seats, Mr Forshaw noted.

 

"But markets are dynamic and, as with many other routes, there will be too much capacity at times and too little at other times," he said. "An open market allows airlines to adjust capacity freely--either up or down--which is a good thing."

 

Certainly, liberalisation has been good for the flying public. They get not only extra seats and flights but also slashed fares, as airlines try to stimulate demand in the face of the current slowdown in the travel segment.

 

The price war erupted several weeks ago when the low-cost boys started offering seats for practically nothing. Travellers could get a return trip to KL for less than S$60 (US$39.6), basically paying for just the airport tax and other surcharges. That's less than the cost of a one-way ride on a luxury coach.

 

Not to be outdone, MAS went to the market with its offer of S$172 nett for a round-trip fare: S$89 out of Singapore and 199 ringgit (US$54.9) out of Kuala Lumpur. SIA then released tickets at S$293 each, for two people travelling together.

 

These discounted fares are way below the round-trip charges of more than S$400 imposed in the days when the two national carriers had a virtual monopoly over the market.

 

The liberalisation of the Singapore-KL market is part of a wider plan to free the skies above Asean.

 

When the transport ministers of the 10 member states met in the Philippines recently, they agreed on a long-term road map that will see the creation of an Asean Single Aviation Market by 2015.

 

When that happens, all carriers of member states will be able to criss-cross the region's skies without any restrictions.

 

But liberalisation rarely comes easy, and fares for the Singapore-KL sector are a case in point.

 

There had long been complaints about the exorbitantly high rates for the 45-minute sector, but it was only in August 2006 that travellers saw a glimmer of hope.

 

Malaysia's then-transport minister Chan Kong Choy surprised many when he revealed that his ministry had set up a committee to study the implications of opening up the route.

 

It took another 14 months for the two governments to decide that they would give low-cost carriers a foot in the market from February this year and allow full liberalisation from Monday.

 

Seventy-one years after Wearne's Air Service--the first airline to operate internal flights in what was then Malaya--launched thrice-weekly Singapore-KL flights in June 1937, the full potential of the market is finally being realised. (By KARAMJIT KAUR/ The Straits Times/ ANN)

 

MySinchew 2008.12.01

 

http://www.mysinchew.com/node/18720

 

[KC Sim 2]

The ASEAN Open Skies that removes restrictions between ASEAN capital cities was supposed to come into effect on 1 Jan 2009 . . . . BUT . . . it is now also known that until it is ratified by the government in all 10 ASEAN member nations, it cannot take effect.

 

So don't expect to see the Open Skies happen anytime soon . . . apparently Indonesia is one country that does not seem willing to ratify this treaty. Now it makes greater sense for Singapore and Malaysia to have their own open skies just a month before the original date for the ASEAN Open Skies. Singapore has similar bilateral open skies agreement with Brunei and a trilateral cargo open skies with Thailand and Brunei.

 

KC Sim

[BC Tam 2]

The ASEAN Open Skies that removes restrictions between ASEAN capital cities was supposed to come into effect on 1 Jan 2009 . . . . BUT . . . it is now also known that until it is ratified by the government in all 10 ASEAN member nations, it cannot take effect.

 

So don't expect to see the Open Skies happen anytime soon . . . apparently Indonesia is one country that does not seem willing to ratify this treaty .....

I understand that Thailand is another country facing difficulty in ratifying the treaty. It needs to be passed by Thai lawmakers first before the govt can agree at ASEAN level apparently, and for now, they have difficulties in even organizing a meeting !

Edited December 2, 2008 by BC Tam

[Ryan Soh 3]

Slowly but surely, this will be the slow death of the SQ 777s in KLIA?