Singapore, Malaysia to Talk about Air Corridor for Budget Carriers

Malaysia and Singapore will hold high-level talks on opening the lucrative Kuala Lumpur-Singapore air route to budget carriers, a news report said Wednesday.

The New Straits Times quoted Transport Minister Chan Kong Choy as saying that he will discuss the matter with his Singapore counterpart Raymond Lim on the sidelines of a meeting of Southeast Asian transport ministers in Bangkok Thursday.

Chan was quoted as saying he and Lim would not go into details during their meeting and leave it for ministry officials who are scheduled to meet "in the first quarter of this year." However, "I would suggest to him officially (on opening up the route early)," he said, according to the Times.

Chan or his aides could not be immediately reached for comment.

If the route is opened up, it would vastly benefit Malaysian-headquartered no-frills carrier AirAsia, which has been asking for the right to fly between both cities. At present, it only flies between Kuala Lumpur and the southern Malaysian city of Johor, located only a few kilometers (miles) from Singapore. The two cities are separated by the narrow Johor Strait.

The Times said Chan did not give any timeframe for the liberalization of the highly protected route on which only flag carriers Malaysia Airlines and Singapore Airlines fly.

A 34-year-old air services agreement between the two countries has ensured that no other airlines are allowed to break the duopoly, where more than 200 flights a week are made between the Southeast Asian cities.

Malaysia Airlines has said it is not in favor of opening the route before 2008 as it would jeopardize its business turnaround plan. But Singapore has said it is ready to expand its air services agreement to increase the connectivity between Kuala Lumpur and Singapore.

An open skies agreement, liberalizing air travel in the region, would be implemented from 2008 when air routes between capital cities of the 10 Southeast Asian would have to open up for full competition. The agreement will be extended to other cities of the 10 countries by 2015.

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