Fernandes wants aviation sector opened to competition

[Naim 6]

More reactions today ...

 

#1

October 26, 2007 14:51 PM

 

MAS Union Objects To Airasia's Entry Into Singapore

 

KUALA LUMPUR, Oct 26 (Bernama) -- The Malaysia Airlines Employees Union (MASEU) Friday asked the government to reverse its decision to allow low cost carrier AirAsia to extend its services to Singapore.

 

Its executive secretary, Mustafar Maarof, contended that the greenlight means Singapore Airlines (SIA) will gain more than Malaysia Airlines (MAS). Both these airlines have been enjoying a duopoly on the Kuala Lumpur-Singapore route since 1982.

 

His reasoning is that Tiger Airways, AirAsia's counterpart that will also offer low cost travel between the two capitals, is a SIA subsidiary, the Singapore flag carrier will gain more in terms of revenue as well as extra landing rights, whereas AirAsia is a standalone company.

 

Mustafar argued that MASEU should have been consulted before the government made the decision. Alternatively, the government ought to have waited until Asean's region-wide open skies agreement came into force in 2009.

 

He described the government decision as a setback to the realisation of MAS' business turnaround plan which is premised on the 2009 open skies timeline, as well as causing it short-term fall in revenue.

 

Prime Minister Datuk Seri Abdullah Ahmad Badawi confirmed yesterday that the Cabinet has agreed to allow AirAsia to fly to Singapore.

 

-- BERNAMA

http://www.bernama.com.my/bernama/v3/news_lite.php?id=292304

 

#2

 

October 26, 2007 14:44 PM

 

Industry Abuzz Over KL-Singapore Air Services

 

SINGAPORE, Oct 26 (Bernama) -- Industry-watchers Friday welcome the move by Malaysia to open up the Kuala Lumpur-Singapore air services, which will allow -- though limited -- access to budget airline, AirAsia, to fly the lucrative route now duopolised by Malaysia Airlines (MAS) and Singapore Airlines (SIA).

 

"The Malaysian government's agreement in principle to remove immediately some access restrictions on four Malaysia-Singapore routes represents a major breakthrough. And not just for Singapore-Malaysia, but for the rest of the region," said Sydney-based Centre for Asia Pacific Aviation (CAPA) in an analysis of the industry.

 

CAPA said if Singapore agreed, the exclusive right of MAS and SIA to provide the services between the two countries would be displaced well before the previous deadline of January 2009.

 

Malaysia announced yesterday it would open up the route to AirAsia. Officials from both countries would meet soon to further discuss the issue.

 

CAPA said although the capacity restrictions would initially limit low-cost carriers' (LCC) entry, the impact would be like "lighting a small fire in dry grass on a windy day".

 

"These routes, so attractive and so poorly served, have been crying out for deregulation and the effects of new entry will dramatically highlight the potential of liberalisation for other markets," said CAPA, predicting that the size of the KL-Singapore market could treble within two years of full liberalisation, by 2011.

 

"For Malaysia, previously the reluctant party, the benefits will be greatest, giving it a boost as a low-cost haven and increasing the challenge to Singapore Changi's short-haul dominance.

 

"It will be welcome news for the local LCCs. MAS too should benefit in the medium term from the market growth as well as from the keener competitive edge the new entry will generate as it continues its restructuring," it said.

 

Meanwhile, Singapore's budget airline, Tiger Airways, said it has approached the Civil Aviation Authority of Singapore yesterday to convey its interest to operate the route "at the earliest opportunity".

 

But Tiger was not the only Singapore-based budget airline eyeing the route.

 

Another LCC, Jetstar Asia, also reportedly said it remained "very keenly interested" in flying to cities in Malaysia.

 

"The moment it's made available to us, we will definitely take it up," Jetstar chief executive officer (CEO), Chong Phit Lin, told Today newspaper.

 

She said there was "no reason for the Singapore authorities to eliminate any local-based airlines from the new agreement.

 

The question on the minds of industry analysts would be which one of the two would eventually get to fly the route.

 

Aviation analyst, Prithpal Singh told Today newspaper, that the Singapore aviation authorities cannot just decide to give it to Tiger.

 

"They may, in fairness, give one flight to Jetstar and one to Tiger.

 

"Alternatively, the Malaysian government may insist that, since it's only AirAsia from our side, you must select one," he said.

 

SIA CEO, Chew Choon Seng, was quoted by Dow Jones on board the first commercial flight of its Airbus A380 to Sydney that the airline was "more than confident we will hold our own in the market sector we occupy".

 

MAS was, however, disappointed with what it described as "premature" opening up of the route to limited flights by low-cost airlines.

 

Managing director, Datuk Idris Jala did not discount the possibility of its "community airline" subsidiary Firefly getting to operate between Subang and Singapore.

 

-- BERNAMA

http://www.bernama.com.my/bernama/v3/news_lite.php?id=292301

[Naim 6]

 

The Star

Friday October 26, 2007

 

Major coup for Tony Fernandes

 

Victory in battle to ply KL-Singapore route

 

By B.K. SIDHU

 

DATUK Tony Fernandes is over the moon. He cannot seem to get the smile off his face the past two days.

 

And he has reason to be in such high spirits. This is a man who fought an uphill battle to get the rights for AirAsia Bhd to ply the Kuala Lumpur-Singapore route, knowing full well in his heart that it was a Herculean task.

 

Never for a moment did he think victory would come so fast, as just a month ago, the Singapore Trade Ministry threw in the towel, dashing his hopes to reach out to Singapore.

 

Tony Fernandes

In fact, he has had a lot of disappointments and the major humiliation was when AirAsia’s buses were not allowed entry into Singapore more than four years ago. Yet, he never gave up. He stood by his cause, lobbied ferociously and, if today he is jumping for joy, the reasons are obvious.

 

The connectivity to Singapore is so vital not just for AirAsia but for its associate airline, AirAsia X, as well for the latter needs to tap into the inbound and outbound traffic in Singapore. That is vital for AirAsia X's success.

 

“It is not my victory but a victory for the nation. I cannot thank both the governments of Malaysia and Singapore enough. My team and I worked so hard and I am thrilled we are given a chance to fly into Singapore,” Fernandes told StarBiz.

 

Yesterday, the Government announced that AirAsia would ply the KL-Singapore route twice daily. Those in the know say the flights would begin by Jan 1, 2008, a year ahead of the liberalisation of air services in Asean capital cities.

 

“Now we have the opportunity to provide the connection on a scale we never imagined before,” he said.

 

Malaysia Airlines (MAS) and Singapore Airlines (SIA) have long dominated the KL-Singapore route and it has not been easy breaking the duopoly and opening up the sector to competition as neither party was willing to give in. MAS had made it clear it needed another year but Fernandes pointed out that “in a globalised world we have to deal with competition and prepare for it”.

 

“The world cannot wait for any player to get ready just as Jetstar did not wait for us to fly into Australia. We cannot make other players wait just because we are not ready,” Fernandes stressed.

 

MAS' reasons are understandable as welcoming competition means losing a lot of the RM400mil it earns from the route now. But to the traveller, it is great news as competition pushes down airfares and the ever-so-popular AirAsia’s RM9.90 one-way airfare would soon become a feature on the KL-Singapore route.

 

Fernandes' dream of AirAsia becoming a Ryanair or Southwest of this region seems to be falling into place with this win.

 

“We did not have the tools until recently to call ourselves Ryanair or Southwest of the East. Now the picture is clear and the only thing we need is better airport infrastructure. That is something we are working on and, hopefully, that can be realised in the not-too-distant future,” he said.

 

A happy Fernandes ended the conversation by saying: “At AirAsia, we make things happen.”

 

Fernandes and AirAsia will certainly remain in the spotlight after this major coup. But the big question is: How long do travellers have to wait for AirAsia X's connections to London, Australia, China, Amritsar and the Middle East?

 

http://biz.thestar.com.my/news/story.asp?f...mp;sec=business

[Izanee 0]

hahaha...naim - good one. ministry of air asia affairs is what they are!

 

anyways - SIA, Air Asia, Tiger airways AND jetstar are rubbing their hands in glee.

 

MH is cowering now in its protected little corner. BTP works but only in a certain way - its goals are to CUT costs by selling slots (i.e. London Heathrow to Air India for millions per slot); cutting routes (even if they are potentially high yielding if they gave it a fair chance e.g. Zurich, Manchester); selling 747s; selling office buildings.

 

to IMPROVE yield - hmmm... i don't know what they've done apart from increase 'fuel' surcharges regularly

 

to expand flights to China/India (where EVERYONE is flying to) ...hmm..i don't think so (xi'an, chengdu, ahmedabad, kolkata suspended) - pathetic three weekly services to BLR is one thing that comes to mind.

 

hmmm... Idris Jala's plan is beginning to show its flaws. He is getting scared now that the government is on the side of Air Asia (bolehland).

 

at the end of the day - i want prices to come down too and i look forward to the competition. just hope people won't get fooled by Tony's promise that he is doing it for the customers cos he is certainly NOT doing it for us.

 

 

 

[Naim 6]

 

26-10-2007: AirAsia to fly KL-S’pore as early as Dec

by Gan Yen Kuan & Lim Shie-Lynn

Email us your feedback at fd@bizedge.com

 

KUALA LUMPUR: AirAsia hopes to start operating the Kuala Lumpur-Singapore route by December after the government confirmed yesterday that the budget airline is allowed to fly the route twice daily.

 

The budget airline is already eyeing 20 flights a day to Singapore once the Asean Open Sky Policy comes into effect in January 2009.

 

Its group chief executive officer Datuk Tony Fernandes said AirAsia hoped to obtain the rights of flying to Singapore by December, and would immediately start operating the KL-Singapore route when it had the black-and-white.

 

“As soon as we get the bilateral rights, we are ready to go,” he said at a press conference in Petaling Jaya last night.

 

Earlier in the day, Transport Minister Datuk Seri Chan Kong Choy said the government would officially propose to the Singapore government on the limited opening of the KL-Singapore route to low-cost carriers at the Asean Transport Ministers Meeting to be held in Singapore from Oct 29 to Nov 3.

 

Chan said he expected negotiations between the two governments on the matter to begin next month.

 

“We are not doing an open sky (agreement) with Singapore. This is only to allow two flights for the low-cost carriers from both countries.

 

“This is a bilateral issue. Malaysia cannot make a unilateral decision. I will be formally conveying this decision of the Malaysian government to my counterpart in Singapore. Subsequently, you can expect some aviation negotiations between the two governments,” he said.

 

Yesterday morning, Prime Minister Datuk Seri Abdullah Ahmad Badawi confirmed that the Cabinet had decided in its meeting on Wednesday to allow AirAsia to fly to Singapore from Kuala Lumpur twice daily.

 

As a reciprocal act, Chan said Malaysia would allow two flights a day by Tiger Airways Pte Ltd into Kuala Lumpur. He was speaking to reporters after inspecting the set-up of the Bukit Jalil national stadium for the upcoming 50th Merdeka Anniversary Cultural and Arts Performance.

 

He said the government’s nod for AirAsia to fly to Singapore was to strengthen Kuala Lumpur International Airport’s (KLIA) position as the leading low-cost carrier hub in Asia.

 

He said the Cabinet had permitted AirAsia to fly out of the low-cost carrier terminal in Sepang, but had yet to make a decision on whether the low-cost carrier could also operate out of other airports to Singapore.

 

On the impact on Malaysian Airline System Bhd (MAS), Chan said: “I wouldn’t want to go into details. The government’s decision is to further enhance KL’s position as a low-cost hub. That is in the interest of the country.”

 

He added that the government had considered MAS’ interest by limiting the number of KL-Singapore flights to be operated by AirAsia to only two times a day.

 

In last night’s press conference, Fernandes said the KL-Singapore route would be a significant contributor to its bottom line next year, and would also strengthen AirAsia X, its low-cost long-haul carrier.

 

“It will be a good contributor to our bottom line given that KL-Singapore is obviously a very lucrative route. I believe one day (when open sky agreement comes into effect) we could be doing 20 flights a day,” he said.

 

News of AirAsia being given the KL-Singapore route saw its share price hit a five-month high to close at RM2.10 yesterday, up 11 sen from Wednesday, with 16.29 million shares done.

 

Fernandes said it had yet to decide on the fare it would offer, citing only the fare of AirAsia’s KL-Johor Bahru return trip of RM60 as reference. He added that the fare of flying to Singapore would depend on which terminal of the Changi International Airport it would land.

 

He said the KL-Singapore route would not affect the performance of its existing KL-Johor Bahru route, as the two were targeting at different market segments.

 

Fernandes said the government’s nod for AirAsia to fly to Singapore before the full liberalisation of the region’s aviation industry in January 2009 would make KLIA the largest and best low-cost carrier hub in the region.

 

“I firmly believe that no one will lose; everyone is going to win. It’s not about MAS or AirAsia. It’s about Malaysia; it’s about building a much stronger regional hub, a much stronger Asean.

 

“The government is pretty clear that no one is going to get hurt by this. I think with the business turnaround plan, MAS has got better. MAS said it was not able to make money in domestic routes since AirAsia came along but it has made money domestically.”

 

“So the argument that one party is going to lose is not the case. Both are going to win and I think the government wants to see two national champions,” he said.

 

AirAsia has long been asking for the KL-Singapore route. Fernandes said it also hoped to get the permission to fly to Singapore out of Kuching, Kota Kinabalu and Penang before 2009.

 

AirAsia has a firm order of 150 Airbus A320 planes, with an option on another 50. Fernandes said it would exercise the option for 25 planes, partly to serve the KL-Singapore route.

 

On a separate matter, Fernandes denied news reports on its Vietnamese joint venture Vina AirAsia’s failure in getting a licence from the Vietnamese government to operate in the country.

 

“As of today, we have not received any directive or official statement from any Vietnamese authorities. As far as AirAsia is concerned, we are on track with the business proposal.

 

“The progress has been positive and both parties are making necessary arrangements to finalise the proposal,” he said.

 

AirAsia signed a letter of intent with Vietnam Shipbuilding Industry Group (Vinashin) on Aug 31 to establish Vina AirAsia to set up its low-cost carrier in Vietnam.

 

http://www.theedgedaily.com/cms/content.js...ebe660-bcbeb27a

[BC Tam 2]

I have this feeling that everyone should just wait for the "details" to be announced (next month I understand) before any party with vested interest pops the champagne or reaches for the valium !

 

Goodness knows what conditions our authorities may dream up; new entrants to the SIN/KUL/SIN route only allowed to operate between 0:00 and 06:00 comes to mind !

 

BTW, anyone else finds it unsettling that it's the Malaysian half that seem so worked up about this 'liberisation' issue (fiasco?) The Singaporeans seem to be comfortable either way (hint, SQ CEO has pointed out they are quite a substantial stake holder in Tiger)

[S V Choong 4]

BC, this is the usual tactics.... divert the fault to somewhere else to make themselves look good. We know it is the MY government and their protectionist stance.........

[M. Sofian H. 0]

Chan: Malaysia Tiada Hasrat Amal Dasar Langit Terbuka

 

PUTRAJAYA, 26 Okt (Bernama) -- Malaysia tidak berhasrat untuk mengamalkan dasar langit terbuka dengan Singapura pada masa ini walaupun wujud perjanjian untuk membenarkan syarikat penerbangan tambang murah negara itu beroperasi dalam laluan ibu kota ke ibu kota, kata Menteri Pengangkutan Datuk Seri Chan Kong Choy hari ini.

 

Beliau menegaskan bahawa perjanjian ini hanya membenarkan penerbangan terhad.

 

Begitu juga apa yang dipanggil perjanjian langit terbuka Asean yang dijadual dilaksanakan pada 2009. Ia hanya melibatkan perkhidmatan penerbangan dari ibu kota ke ibu kota dalam rantau ini, jelasnya kepada pemberita di pejabatnya di sini.

 

Kerajaan Malaysia telah membuka pintu kepada syarikat penerbangan tambang murah tempatan, AirAsia, untuk mengadakan penerbangan di laluan Kuala Lumpur-Singapura, dengan perkhidmatan yang serupa oleh syarikat penerbangan tambang murah Singapura.

 

Laluan itu menjadi duopoli antara Malaysia Airlines (MAS) dan Singapore Airlines (SIA) sejak 1982.

 

Mengenai kekecewaan syarikat penerbangan nasional MAS terhadap langkah membenarkan AirAsia memasuki laluan lumayan itu, Chan menegaskan bahawa MAS juga pasti beroleh manfaat daripadanya.

 

"Misalnya, MAS mengadakan lebih banyak penerbangan KL-Bangkok sejak kerajaan melonggarkan laluan bagi syarikat penerbangan tambang murah," katanya.

 

Chan menegaskan sekali lagi bahawa keputusan kerajaan itu bertujuan memperkukuhkan kedudukan Kuala Lumpur sebagai hub perkhidmatan tambang murah terkemuka di Asia.

 

MAS telah membantah pembukaan laluan KL-Singapura kepada syarikat penerbangan lain kerana ini sedikit sebanyak menjejaskan rancangan pemulihan perniagaannya yang kerangka masanya ditetapkan hingga pelaksanaan "langit terbuka" Asean pada 2009.

 

-- BERNAMA

 

Ha Ha Ha Ha My Father Tell me, this is 'low-class' statement by Minister.... short term planning.....

 

 

Edited October 26, 2007 by M. Sofian H.

[S V Choong 4]

Again, the provision of an English version or a brief translation of what you have been talking about will grateful...... not every member is proficient in Malay...

[FK Wong 0]

time to give our national carrier a good run after sitting down being too happy all these while.

[Nizam 0]

Profit Profit Profit ... only for TF, some staff and shareholder

 

I still heard most of the staff especially ground staff complained

 

Their allowances and overtimes is not paid

 

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

 

I just came back from the KIA airport

 

While waiting for my turn at KFC

 

Again heard chit chat among AK staff about this

Edited October 26, 2007 by Nizam

[Nick R. 0]

SIA CEO, Chew Choon Seng, was quoted by Dow Jones on board the first commercial flight of its Airbus A380 to Sydney that the airline was "more than confident we will hold our own in the market sector we occupy".

Sure..70/80% load each way (100% EVERY thursday & friday) plus some of MH's shuttle paxs 'given' to us freely by not calling shuttle numbers & canceling flights, whats there to worry ...

 

SQ partly own Virgin Atlantic, Virgin Group partly own AirAsiaX, so SQ & AK long distance cousin?

[Izanee 0]

you're right mate - i didn't realise that!!! in a way we were right when we said that SQ,AK,tiger will be laughing and running to the bank!

they're all linked together.

 

unfortunately, MH WAS linked to air maldives (managed to bankrupt them) and cambodian airlines (also bankrupt).

 

hmmm... maybe they should have bought a few shares in SQ or AK!

 

 

[V Wong 0]

Go to Straits Times Singaporefor SIA CEO's view on KUL-SIN route liberalisation

Edited October 27, 2007 by V Wong

[T Azahan 1]

MH could have bought a stake in air asia few years ago.

[Naim 6]

The Minister of AirAsia Affairs Transport hard at work already. Firefly got swatted again.

 

Wednesday October 31, 2007

The Star

 

Chan to discuss AirAsia’s request with Singapore

 

KUALA LUMPUR: Transport Minister Datuk Seri Chan Kong Choy will discuss AirAsia’s request to start flights between Kuala Lumpur and Singapore with his counterpart at the Asean Transport Ministers Meeting in the republic tomorrow.

 

However he would not be discussing the request to ply the same route by Firefly, a subsidiary of Malaysia Airlines, during the meeting, he said at the Parliament Lobby yesterday.

 

Last week, the Cabinet agreed to give AirAsia and Singapore’s Tiger Airways the go-ahead to start flights between Kuala Lumpur and Singapore.

 

...

[Philip 1]

I thought yesterday's news said that Firefly would be allowed to fly the sector also?

 

Perhaps he will be discussing it at a later time.

[N Azman 0]

Well, why would firefly want to damage MH's coffers even more by offering SZB-SIN flights? As if the current threat from AK/Tiger isnt bad enough.....