MAS had been CHEATING public by 100%
From The Star, Malaysia
6 August 2002
AirAsia wants level playing field to compete with MAS
By CLARENCE CHUA
PETALING JAYA: AirAsia, which started its no-frills flights last year,
wants a “level playing field” to compete with Malaysia Airlines in the domestic market.
The airline is concerned that MAS, which slashed its fares for
jet-powered flights to local destinations, would eat into its profits
and cripple its operations.
“They are well-supported by the Government – their financial source is almost a bottomless pit.
“On the other hand, we in AirAsia are self-financed; some of us had to mortgage our homes to acquire the investments,” said its chief executive officer Tony Fernandes.
He added that for AirAsia to even start its flights to Miri in Sarawak was a “big thing” compared to MAS considering it just another destination.
The airline currently operates four Boeing 737-300s to seven
destinations that include Labuan, Penang, Kuching, and Kota Kinabalu from KLIA. A one-way ticket is priced from RM88 for all destinations except Labuan.
AirAsia uses Kota Kinabalu as its regional hub and MAS, said
Fernandes, was also trying to coax the Sabah government to allow it to use the city as its hub.
“They (MAS) have 14,000 seats, we have only 3,000 seats available. They have 18 flights a day to Kuching, we have four planes,” he told The Star.
The national carrier recently introduced a SuperSaver scheme which provides 50% discounts to travellers on all domestic economy-class fares – with the frills.
“It is ironic that MAS was previously pushing for higher fares. Would they have slashed their fares if AirAsia did not introduce the no-frills flights?” asked Fernandes, adding that since MAS started its low-cost fares, bookings on AirAsia had dropped by 40%.
AirAsia does not serve free refreshments and tickets are issued on a first come first served basis.
“If MAS wants to provide free seats, no problem. But it has to be on level playing terms. This means their funding has to be right.
“They stated that they are losing RM300mil to RM400mil on domestic services a year. Who is funding them? If we go out of business, they become a monopoly. Is that good for competition? Would they revert to higher fares or will their fares remain?” he asked.
Fernandes said that AirAsia officials would meet Ministry of Transport officials to seek clarification on the MAS programme as it looked like it was designed to wipe out AirAsia.
MAS officials, when contacted, declined to comment.