A deregulated Singapore-Malaysia skies opens fierce debate
By S Puvaneswary and Mak Ying Kwan
KUALA LUMPUR AND SINGAPORE – Malaysian outbound agents find the prospects of dirt-cheap air fares between Singapore and Kuala Lumpur (KL) scary, while Singapore agents who work with budget carriers cannot wait for them to crack the route finally.
Twice daily services by AirAsia and a Singapore low-cost carrier (LCC) on the Singapore-KL route could begin as early as December if Singapore agrees.
Malaysia’s government gave its in-principle nod last week.
This route has been monopolised by Singapore Airlines (SIA) and Malaysia Airlines (MAS), resulting in one of, if not the highest, fares in the region in relation to distance flown.
Its deregulation is a real breakthrough and will have various implications for various sectors.
Malaysian outbound agents argue business at Kuala Lumpur International Airport (KLIA) will suffer, likewise, tourism in Johor, Malaysia’s southern gateway.
Golden Tourworld Travel managing director, Mr Jason Lim, believed KLIA’s passenger load would be diluted as most international flights from Singapore Changi Airport were cheaper.
He said the savings would entice travellers to use a budget airline to Singapore and catch their connecting flights from there.
New Asia Holiday Tours & Travel general manager, Mr Raaj Navaratnaa, said return Singapore-Perth fares on Qantas started from RM1,000 (US$299.55), compared with at least RM1,500 on MAS from KLIA.
He added the KL-Bangkok route also stood to lose. A return flight from KLIA to Bangkok costs about RM700 on MAS and Thai Airways International, whereas travellers could get a return ticket on a full-fledged airline for less than RM500 from Singapore. Mr Navaratnaa said: “SIA offers good rates to Europe, Australia and China. For travellers, it is a 15 to 20 per cent savings compared to MAS.”
Air Asia CEO, Datuk Tony Fernandes, already hinted at the kind of fares agents could expect. “We fly to Johor for about RM60 one way and Singapore is just two minutes away. So do your maths.”
Malaysian Harmony Tour & Travel CEO, Mr Cooper Huang, predicted keen airline competition in the future, with MAS having to reduce its fares to compete effectively.
He said: “The greater impact will be in 2009 when Singapore opens its integrated resort in Marina Bay. For now, international cruises operating out of Singapore will benefit as cheap air fares will encourage more Malaysians to travel to Singapore to take their cruise."
Johor also stood to lose out if fares between Singapore and KL, and from Johor to KL, were competitive, Mr Navaratnaa said.
He added if the cost difference was negligible, travellers would fly direct from Singapore to KL, bypassing Johor altogether.
Outbound agents in Singapore who capitalise on LCCs anticipate increased business. Bargain Travel Outlet general manager business development, Mr Jed Chin, said: “Although LCCs cost more than buses, I believe there will be leisure travellers who will choose to fly. It saves time and is more convenient for those heading to northern Malaysia. They can transit at the KL airport and catch domestic flights.”
Farmosa Holiday Tour sales and marketing manager, Mr James Wong, said: “I welcome LCCs on this sector.
“I anticipate a 10 to 15 per cent increase in business from this development. We have corporate clients who are sometimes forced to use express buses as the air fares on SIA and MAS are too high. This is inconvenient for them. The LCCs will give them and other travellers more choice. We were afraid when LCCs first started flying to Bangkok as we thought our business would suffer. But such carriers are the trend; there is no turning back. So let’s make use of it and seize the business opportunities. We will encourage our clients to book early so we can package tours to KL and other nearby cities using the travel agent fares.”
Meanwhile, at press time, Malaysia’s transport minister, Datuk Seri Chan Kong Choy, said he would raise the issue of allowing MAS’s subsidiary, Firefly, to fly to Singapore from Subang, when he meets his Singapore counterpart, Mr Raymond Lim, at the ASEAN Transport Ministers Meeting on November 1.
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