Open skies policy

[Sanjay Thaker 0]

Hey guys,

 

We all know that most of the countries in Asia and S.E Asia are moving towards open skies policy especially within the S.E Asian region between ASEAN countries...anyone knows when specifically would this be implemented?

[Keith T 2]

The ASEAN open skies policy is scheduled to be implemented region-wide in 2008.

[Sanjay Thaker 0]

i heard that its gonna be implemented partially in 2008 and not completely..is that true Keith?

[Keith T 2]

i heard that its gonna be implemented partially in 2008 and not completely..is that true Keith?

 

Unfortunately I only have a vague idea of the details.

[Sandeep G 1]

Grab a copy of this weeks "The Edge"

 

Great article in there by Maryanne Tan about opening up of the KL-Singapore route.

 

The Transport minister (Mr. Chan Kong Choy) has received the findings of the study conducted with regards to the premature liberalisation of the KUL-SIN vv sector. The findings are not yet published, but will be revelaed in parliament soon.

 

BTW, if you lazy to get the Edge, the conclusion was: "Don't expect to see the route opening up before the targeted 2008"

 

Another interesting point addressed by the article is the impact the opening up of the route to AK and Singapore LCCs would have on MAS' BTP... with some RM20million being made yearly (?) on the KUL-SIN service... and if that diminishes due to increased competition, then almost 50% of MAS' turnaround profit would be in jeapordy.

Edited October 31, 2006 by Sandeep G

[Lawrence L 0]

Hmmm... It seems like goverment is protecting our "beloved" Mas...

 

I mean... Business is business... The competition is a always there... It will come sooner or later...

 

It's like the Apprentice show... If you can't survive... YOU're fired... Oopppss.. A little over...

 

BTW, never know that KL-SIN route can generate so much money....

[Sandeep G 1]

BTW, never know that KL-SIN route can generate so much money....

 

The price for a shuttle flight nowadays is absolutely ridiculous... that's why MAS (and probably SIA too) love this route so much and want to maintain a duopoly for as long as possible.

 

[KK Lee 5]

 

KUL/SIN is one of the best if not the best yield route for MH. They won’t give up without a fight.

 

 

 

 

[Pieter C. 5]

KUL/SIN is one of the best if not the best yield route for MH. They won’t give up without a fight.

 

Sooner or later they have too; that's all part of an 'Open Skies' agreement

 

The money-maker for KLM used to be AMS-LON(LHR); used to be flown with DC-8-63's regularly (and BA with L1011's)...look at the LON routes now: KLM operating 734's and BA with 319's, plus the many SleazyJets plying this route now (to LTN/STN and LGW)...the high-profit route has now changed to the LCY airport (high fares, yet 'cheap' equipment, like F50)...

 

[Keith T 2]

The price for a shuttle flight nowadays is absolutely ridiculous... that's why MAS (and probably SIA too) love this route so much and want to maintain a duopoly for as long as possible.

 

The KUL sector is profitable for SQ only because of connecting pax. SQ actually makes losses for the SIN-KUL-SIN sectors in isolation. Same for PEN I believe. Hence I don't think LCCs are going to make much of a difference. Government officials, businessmen and connecting pax are still going to fly SQ anyway. Currently those who choose to travel cheaply between SIN and KUL take the bus anyway. The only real threat I can forsee is if the express rail project actually takes off - not only is it going to be a more cost effective means of travel, it adds an additional incentive - convenience.

Edited October 31, 2006 by Keith T

[Pieter C. 5]

The only real threat I can forsee is if the express rail project actually takes off - not only is it going to be a more cost effective means of travel, it adds an additional incentive - convenience.

 

and.............environmentally more 'correct'

[Keith T 2]

and.............environmentally more 'correct'

 

Well yes, but somehow I doubt pax actually care about environmental issues.

Sad but true.

[KK Lee 5]

The KUL sector is profitable for SQ only because of connecting pax. SQ actually makes losses for the SIN-KUL-SIN sectors in isolation.

 

It was true years ago but not lately. Currently, KUL/SIN per km price is among the highest. Because of this high yield, SQ ex-KUL price to other destinations is much higher than MH. Hence, haven’t taken SQ in the last 2 years.

 

To protect Plus highway and MH, and deter pax traveling from SIN; the express rail link to JHB is unlikely to be built anytime soon.

 

From the Proton car experience, the Malaysian Government is very good at finding excuses to delay trade liberation. Hence, until the open sky policy is implemented, one can only speculate.

 

 

[Sanjay Thaker 0]

I agree...in contrary to people's perception, LCCs do capture a certain percentage of a full frills airline's pax load but its not too big, most of the pax on LCCs are actually bus users...and first time airline pax mostly..

[Sandeep G 1]

The only real threat I can forsee is if the express rail project actually takes off - not only is it going to be a more cost effective means of travel, it adds an additional incentive - convenience.

 

I am not too sure about "cost effective" means of travel.. because rail projects often have a very long breakeven date due to the large costs in implementing such a project.. Plus, rail travel isn't that cheap is it? look at the English intercity rail services.. and how cheap would the service be?? It is already RM35 ONE WAY between KL and KLIA... I'm sure you would be looking at a price of around at least RM150 one way (which is significantly cheaper than the present SIA/MAS airfares).. but AirAsia would be able to better that I reckon...

 

Are Departure and Arrival taxes payable for international train services between Singapore and Malaysia???

[Sandeep G 1]

Here's a quote from Singapore's Minister for Transport, Raymond Lim:

 

"We've been ready to expand the [singapore-Malaysia] air services agreement for quite some time now and I think that it's timely to do so. It's a great pity that we have not revised this particular agreement for the last 20 years. But we've always been ready and we have a liberal air policy. I think they know our views on this matter, but we need to see the [Malaysian Government's] proposal to see how best we can take it forward," Raymond Lim, Minister for Transport. Source: Singapore Business Times, 01-Nov-06.

 

Meanwhile, Singapore is pushing for an Open Skies Policy between ASEAN and China! This could be a real boon for Singapore, if not even Malaysia - but of course, more ocmpetition.

[Keith T 2]

I'm sure you would be looking at a price of around at least RM150 one way (which is significantly cheaper than the present SIA/MAS airfares).. but AirAsia would be able to better that I reckon...

 

I meant cheaper for pax than the SQ/MH fares. The target demographic would be people who currently fly SQ/MH, who're predominantly business folk and government officials. The convenience provided by such a form of travel will never be matched by flying. Connecting pax will still continue to fly MH/SQ of course.

 

And perhaps the same people as suggested above would be willing to pay a little more than flying an LCC for the incentive of convenience? There's still the hassle of getting to KLIA, checking in etc etc if flying on an LCC.

 

 

Not sure about taxes.

[KK Lee 5]

 

Believe for the same destination, SQ ex-KUL fare is cheaper than ex-SIN. Doubt many airline pax will take train to SIN.

 

Express rail will take 50 years and more to return on investment. Typically, Malaysian company made money by building it not operating it. The banks, shareholders (if listed), Government and people will take the burden.

 

 

[Keith T 2]

Believe for the same destination, SQ ex-KUL fare is cheaper than ex-SIN. Doubt many airline pax will take train to SIN.

 

Connecting airline pax definitely won't take the train to SIN.

But people on a SIN-KUL-SIN turnaround might.

Edited November 1, 2006 by Keith T

[KK Lee 5]

 

Believe there are more people traveling on Eurostar between London and Paris than by flight.

 

 

[Sandeep G 1]

Believe there are more people traveling on Eurostar between London and Paris than by flight.

 

Would congestion at London/Paris airports be a reason for this?? I myself have taken the Eurostar in 1996 (shortly after the channel tunnel fire) and found the service to be superb! Very interesting and of course convenient!!

 

Europes rail network is by far more developed but then their technology is so good! Not to say we can't have the same technology here - it's just that procurement costs would be higher and return on investment also longer.. our exchange rate situation does not help at all.

 

KUL and SIN are still readily accessible (albeit KUL quite a way out of the city).. I've always wonered why we can't check in for SQ shuttle flights from KL CAT... I would have thought that would be the first?? Or can you and I've just never realised???

[Keith T 2]

Would congestion at London/Paris airports be a reason for this??

 

Congestion - totally. If your flight utilises one of the runways that's further out at CDG - I swear, the taxiing time feels longer than the actual flight time.

 

That and the fact that the Eurostar takes you right into the city centre. Both CDG and the various London airports are zillions of miles out in the sticks and can be quite expensive to access. There are relatively affordable airport-city methods of travel like the HEX or the Tube, but the convenience of the Eurostar is unparalleled. The only times i do LHR-CDG are when it's part of an international itinerary (most QF/BA fares come with 2 transfers in each direction of LON), or part of a mileage run.

Edited November 3, 2006 by Keith T

[KK Lee 5]

That and the fact that the Eurostar takes you right into the city centre. Both CDG and the various London airports are zillions of miles out in the sticks and can be quite expensive to access. There are relatively affordable airport-city methods of travel like the HEX or the Tube, but the convenience of the Eurostar is unparalleled. The only times i do LHR-CDG are when it's part of an international itinerary (most QF/BA fares come with 2 transfers in each direction of LON), or part of a mileage run.

 

The distance from KLIA to KLCC is slightly more than double of from LHR to Central London.

 

That’s why KLIA is not easy to be a popular hub and the Government won’t permit high speed rail to JHB to be built anytime soon.

 

 

 

 

[Sandeep G 1]

The distance from KLIA to KLCC is slightly more than double of from LHR to Central London.

 

That’s why KLIA is not easy to be a popular hub and the Government won’t permit high speed rail to JHB to be built anytime soon.

 

KLIAs location is far, but the population catchment is significantly larger. Seremban, PD, Nilai, are all relatively nearer now and more accessible to KLIA.

 

Plus, growth is all happening to the south of KL. I think in time, KLIA will be successful, but it needs careful and strategic management which is today its only flaws.

[Sandeep G 1]

Well, to bolster their efforts towards achieving ASEAN open skies, Tony Fernandes today had this to say at the final day of the CAPA hosted Asia Pacific and Middle East Aviation Outlook Summit in Singapore:

 

Source: CAPA

One day we’ll get to Singapore: Fernandes

 

(Singapore: 10 November 2006) Opening the second day of CAPA’s Outlook 2007, AirAsia CEO Tony Fernandes recounted some of the reasons behind the region’s leading LCC’s success, while also calling on governments to abolish the “old-fashioned” rules that continue to hamper the LCC sector’s growth. “We still have ownership policies that view foreign control as ‘traitorous’ and protectionist access rules that misguidedly destroy opportunity cost to ‘save’ national pride,” he lamented.

 

Mr Fernandes, who has run AirAsia since its rebirth as a low cost carrier in 2001, overseeing its rise into Asia’s largest and most profitable LCC, also said that the carrier aims to both accelerate and add to its A320 order book with Airbus, which currently stands at 100 firm orders (12 of which have been delivered) and 30 options. Explaining the carrier’s decision to add to its already ambitious growth plans, he stated: “As long as we have the lowest costs, we’ll have the lowest fares, and as long as we have the lowest fares, there’s an almost unlimited market out there.”

 

But, he said, in the short term, “AirAsia will not be chasing new joint venture opportunities,” such as in China.

 

Speaking of the success of the carrier’s joint venture partners in Bangkok and Jakarta, he still noted that, like its parent, AirAsia Indonesia was prohibited from flying to Singapore. While frustrating, he claimed confidence that this restriction will ultimately end. “The rules have to change, and I am confident they will,” he said. “One day we will operate into Singapore, and I will operate 20 daily flights from here to Kuala Lumpur. We recognise that this market needs to be opened progressively, but it is important that monopolies (flag carriers) should not control the agenda.”

 

Slightly off topic, but it is interesting to hear his views on "foreign ownership" when big media reports in Malaysia are stirring over the possible purchase by Volkswagen AG of 51% of Protons Manufacturing!! I sense some undertones in Dato' Tony's words!

Edited November 10, 2006 by Sandeep G