It defies logic starting an airline in the back yard of one of the most formidable low-cost carriers, with probably the lowest unit costs of any airline in the world - Air Asia.
The business model and positioning that Malindo have put forward makes them more of a threat to MAS than to Air Asia in fact, so perhaps they know they will not be able to compete on price alone...or maybe they don't. If they do then the begging bowl will be out repeatedly as getting into a price war with AK will not end well.
The low cost airline business model is easy to describe on paper but much harder to put into action in real life. Do the Malindo management have the pedigree to do this? Lion is reputedly poorly run and survives on much smaller margins than say AK so their way of doing things may not translate well in Malaysia.
I foresee AirAsia making life very difficult for these guys regardless of whether they launch it or not.