One of Asia's most restrictive air services agreements, between Malaysia and Singapore, is set to be finally liberalised with in-principle approval for low-cost carriers to enter the market.
Malaysia's Cabinet has given approval for Kuala Lumpur-based AirAsia and a Singapore-based low-cost carrier to operate on the Kuala Lumpur-Singapore route, which is dominated by Malaysia Airlines and Singapore Airlines. Other routes may also be opened up in a final agreement between the two countries, such as between Singapore and Penang, Kota Kinabalu and Kuching.
Malaysia and Singapore last reviewed their bilateral in 1980. Low-cost carriers have been seeking rights to operate between the two countries for some time, however, and over the past year there have been indications they may soon get approval.
Malaysian authorities previously said they wanted to wait until December 2008, when the first elements of a multilateral Open Skies accord are due to take effect between the 10 members of the Association of Southeast Asian Nations. AirAsia in particular has been lobbying for earlier entry to the Kuala Lumpur-Singapore route. From Singapore's side Tiger Airways and Jetstar Asia say they are interested in launching services to Malaysia.
MAS expressed disappointment at the developments and says its new regional subsidiary Firefly may seek authority to serve Singapore.
Source: Airline Business
