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Mon, Feb 12, 2007 - Page 10 News List

Malaysia's AirAsia covets Singapore-Kuala Lumpur route

AFP , KUALA LUMPUR

The head of Malaysian low-cost airline AirAsia said yesterday he hoped to secure approval by May to fly between Singapore and Kuala Lumpur and could operate 20 flights a day on the lucrative route.

Tony Fernandes, who has promised much lower ticket prices than are currently available on the route, said aviation officials from Malaysia and Singapore were expected to meet next month to iron out the details.

"Obviously, it is an important route for us. It is like the busy Paris-London route. And it will surely be profitable," Fernandes told said, adding that Kuala Lumpur was "set to become a hub for low cost carriers."

"By April or May I hope to get the approval," he said.

Gaining access

AirAsia has been pushing hard for access to the route, which is dominated by Singapore Airlines and Malaysia Airlines.

The two carriers account for 85 percent of traffic on the 30-minute route between the two cities, with a confirmed round-trip ticket departing from Singapore costing more than S$450 (US$294), including taxes.

Fernandes said a one-way AirAsia ticket would start from US$60.

The AirAsia chief also said the airline had taken delivery of 16 new A320 Airbus aircraft and would have 23 jets in June.

"We are very happy with the A320 aircraft. The operation cost of the jets is lower than expected. The fuel burn is less than expected," he said.

Fernandes also brushed aside any fears of competition from Singapore budget airline Tiger Airways.

Tiger, which began flying in 2004, is owned by four shareholders including Singapore Airlines and state-linked Singapore investment firm Temasek Holdings.

Formula

Fernandes brought budget air travel to Southeast Asia in 2001 with his successful short-haul low-cost formula.

Last month he surprised the aviation industry by announcing a new budget airline, AirAsia X, for long-haul routes.

AirAsia X will announce its choice of 20 aircraft -- which is believed to be worth some US$4 billion -- next month for its service to Britain and China, Raja Mohamad Azmi, chief executive officer of Fly Asian Express (FAX), said yesterday.

"An evaluation to pick either Airbus 330-300 or Boeing 777-200 for the new long-haul carrier AirAsia X has been completed and an announcement will be made in March," he said.

He did not elaborate.

The airline will be operated by FAX, which operates rural air services on Borneo island.

Deciding factors

Airline officials familiar with the purchase plan said price and availability of aircraft are among the major factors in deciding the winner.

Raja Azmi said that the new service will take off in August with inaugural flights to Britain and China expected to be launched simultaneously.

"We will initially lease three aircraft -- either the Boeing 777-200 or the Airbus 330-300 to begin the service," he said.

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