Wed "The Star" Kuala Lumpa
AirAsia may give up expansion into Singapore
HAVING undergone a tough time to launch its latest flight from Jakarta to Singapore, AirAsia Bhd chief executive officer Tony Fernandes says he has had enough of Singapore’s tactics and the airline may give up completely its interest to expand there.
The Singapore government is currently deciding whether to allow AWAIR, an AirAsia 49% associate, to operate flights from Jakarta after halting its maiden flight at the eleventh hour recently for allegedly not having a full documentation.
Addressing an audience comprising bankers and senior officials from regional financial institutions at the 5th Malaysia Capital Market Conference 2005 in Kuala Lumpur, Fernandes did not mince his words about the treatment he had received from the Singapore government.
He said the latest incident reflected how the Singapore government had tried to block the entry of low-cost carriers (LCCs) such as AirAsia from competing directly with the republic’s homegrown LCC and its national airlines Singapore Airlines (SIA) and Silk Air. There are currently three LCCs based in Singapore - SIA-owned Tiger Airways, Qantas-owned Jetstar Asia and privately-owned Valuair.
Tony Fernandes
“First they barred our bus from entering Singapore, now they have barred us from taking our planes there despite their earlier approvals,” he said.
He said his experience showed that Singapore was not as open to business as they had portrayed itself to be.
“From our experience, they are very closed and we want to tell the whole world about it,” said Fernandes, who left the conference audience in stitches with his straightforward presentation style.
He said the decision to stop AWAIR flight had upset the Indonesian authorities and disrupted the travel plans of passengers who had made their travel bookings earlier.
Fernandes said he was prepared to face the consequences for being vocal about the treatment he received from the Singaporean government.
“After this, we may cancel our intention to fly to Singapore from Jakarta,” he said, adding that AirAsia could grow well without having to operate from the island.
Fernandes also said AirAsia was on track to achieve its forecast profit of RM172.8mil for its financial year ending June 2005.
“Our second quarter result had been encouraging, and we are confident of achieving our target,” he said, but declined to elaborate.
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