Wirraway
29th Jul 2004, 05:09
Thurs "The Star" Malaysia
AirAsia urges MAS to join hands in national interest
BY B.K. SIDHU
THE mere suggestion that Malaysia Airlines (MAS) has the capability to set up a no-frills low-cost carrier (LCC) has irked local rival AirAsia Sdn Bhd, which feels that the two airlines should work together for the benefit of the country instead of fighting each other.
At a press conference called at short notice yesterday, AirAsia chief executive officer Tony Fernandes claimed that despite many efforts by AirAsia in the past three years to sit down and talk with the MAS senior management on how the two parties could collaborate, the national carrier had yet to respond.
He said the move by MAS to go into the low-cost business was “emotionally driven'', and voiced disappointment that the national flag carrier was talking to other airlines – instead of AirAsia – concerning its plan to roll out an LCC.
Fernandes' frustrations can be understood given that AirAsia is planning an initial public offering and wants to add 80 more aircraft to its fleet, and any plan by MAS to expand into low-cost business can potentially be a threat to AirAsia.
“It appears to me that it is a waste of resources for MAS to start a low-cost air service when other countries are already developing their LCCs,'' he said. “For us to compete with the national carrier on low-cost services (is odd) when we should be using our resources to compete with upcoming LCCs such as Tiger Airways. It is really frustrating.''
“Malaysia already has the lead in the LCC business. Why waste energy and resources? Why not collaborate to promote Malaysia as an airline hub? Why should we continue the emotional battle?'' he asked.
Fernandes was responding to comments by MAS managing director Datuk Ahmad Fuaad Dahalan on Tuesday that MAS could roll out an LLC, or no-frills budget airline, in six months if the situation warranted.
Fuaad was reported as saying that a preliminary proposal had been submitted to the Transport Ministry and the national carrier had sounded out other regional carriers on the possibility of establishing a low-cost carrier on a joint-venture basis.
He was also quoted as saying that MAS would not rush into the LCC business if the ground rules in the aviation industry did not change, as it could still withstand the competition under the existing scenario.
“But if things change, then it will be just a matter of time (before we set up an LCC),'' Fuaad said.
Fernandes asked why should MAS work with other airlines when there already was a home-grown LCC.
Noting that full-fledged carriers such as British Airways and KLM had failed miserably in their efforts to offer low-cost air services, Fernandes said MAS should concentrate on its international routes instead of trying to slug it out in the LCC market.
“MAS should best spend (its time) flying to Paris daily or developing its India and China routes,'' he said.
But, in the region, almost every full-fledged carrier is keen to venture into the LCC business, which aviation pundits say is the area of future growth.
Cathay Pacific and Thai Airways have plans to do so and are even willing to slash fares to keep their aircraft filled, competing with the existing LCCs.
There now are two LCCs in operation in the region, and AirAsia has the first mover advantage. Singapore's ValuAir, which began services recently, flies to several destinations in the region, and is willing to drop rates to fill its planes.
Two newcomers are preparing to take to the skies soon: Singapore Airlines' (SIA) Tiger Airways, a joint venture with the Ryan family that started Europe's largest LCC, Ryanair Holdings; and Qantas Airways' Jetstar Asia.
“We are the lowest cost airline in the world and we believe that we will always continue to dominate the market. “We are competing against big airlines like Thai Airways, Cathay Pacific and SIA,'' Fernandes said, adding that many airlines had tried and failed in the low-fare market.
========================================
Bloomberg
Singapore's Valuair to Add Two Aircraft to Meet Rising Demand
July 29 (Bloomberg) -- Valuair Ltd., a Singapore-based discount airline, plans to lease two aircraft this year to double the size of its fleet so it can add more routes in Asia, where cheaper airfares have spurred travel demand.
The airline plans to lease two A320 aircraft made by Airbus SAS, adding to the two A320s it already has, chairman Lim Chin Beng said. The new aircraft will be available by the end of the year, Lim said, without giving more details.
"With just two aircrafts it will be too difficult to be operating in an economy of scale,'' he said, in a televised interview at the Asia-Pacific Economic Cooperation forum's transport ministers' meeting in Bali, Indonesia.
Valuair, which began flying in May, needs to expand to compete effectively with the increasing number of low-cost airlines being set up in Southeast Asia. There are as many as eight discount carriers in the region, including Malaysia-based AirAsia Sdn. and Tiger Airways Ltd.
The A320 aircraft can seat up to 150 passengers and can fly a maximum range of 3,000 nautical miles. Valuair uses its two current A320 planes for flying to Hong Kong, Bangkok and Jakarta from Singapore. A new A320 plane carries a catalogue price of $63 million. Valuair leases its two A320 planes from Singapore Aircraft Leasing Enterprise. Lim declined to give additional details of Valuair's plans for the new leases.
Valuair is also facing competition from regular-service airlines like Singapore Airlines Ltd. and Cathay Pacific Airways Ltd., which are cutting their prices. Singapore Airlines, the world's second-largest carrier, now offers a return ticket to Bangkok for three-quarters Valuair's fare, Lim said.
Even with the price war, Lim, a former Singapore Airline managing director, said Southeast Asia's air travel market -- with a combined population of 500 million in the region -- is big enough for more budget carriers.
With cheaper fares, "people will travel more often,'' Lim said. "There's a tremendous potential. We haven't even scratched the surface for demand.''
===========================================
AirAsia urges MAS to join hands in national interest
BY B.K. SIDHU
THE mere suggestion that Malaysia Airlines (MAS) has the capability to set up a no-frills low-cost carrier (LCC) has irked local rival AirAsia Sdn Bhd, which feels that the two airlines should work together for the benefit of the country instead of fighting each other.
At a press conference called at short notice yesterday, AirAsia chief executive officer Tony Fernandes claimed that despite many efforts by AirAsia in the past three years to sit down and talk with the MAS senior management on how the two parties could collaborate, the national carrier had yet to respond.
He said the move by MAS to go into the low-cost business was “emotionally driven'', and voiced disappointment that the national flag carrier was talking to other airlines – instead of AirAsia – concerning its plan to roll out an LCC.
Fernandes' frustrations can be understood given that AirAsia is planning an initial public offering and wants to add 80 more aircraft to its fleet, and any plan by MAS to expand into low-cost business can potentially be a threat to AirAsia.
“It appears to me that it is a waste of resources for MAS to start a low-cost air service when other countries are already developing their LCCs,'' he said. “For us to compete with the national carrier on low-cost services (is odd) when we should be using our resources to compete with upcoming LCCs such as Tiger Airways. It is really frustrating.''
“Malaysia already has the lead in the LCC business. Why waste energy and resources? Why not collaborate to promote Malaysia as an airline hub? Why should we continue the emotional battle?'' he asked.
Fernandes was responding to comments by MAS managing director Datuk Ahmad Fuaad Dahalan on Tuesday that MAS could roll out an LLC, or no-frills budget airline, in six months if the situation warranted.
Fuaad was reported as saying that a preliminary proposal had been submitted to the Transport Ministry and the national carrier had sounded out other regional carriers on the possibility of establishing a low-cost carrier on a joint-venture basis.
He was also quoted as saying that MAS would not rush into the LCC business if the ground rules in the aviation industry did not change, as it could still withstand the competition under the existing scenario.
“But if things change, then it will be just a matter of time (before we set up an LCC),'' Fuaad said.
Fernandes asked why should MAS work with other airlines when there already was a home-grown LCC.
Noting that full-fledged carriers such as British Airways and KLM had failed miserably in their efforts to offer low-cost air services, Fernandes said MAS should concentrate on its international routes instead of trying to slug it out in the LCC market.
“MAS should best spend (its time) flying to Paris daily or developing its India and China routes,'' he said.
But, in the region, almost every full-fledged carrier is keen to venture into the LCC business, which aviation pundits say is the area of future growth.
Cathay Pacific and Thai Airways have plans to do so and are even willing to slash fares to keep their aircraft filled, competing with the existing LCCs.
There now are two LCCs in operation in the region, and AirAsia has the first mover advantage. Singapore's ValuAir, which began services recently, flies to several destinations in the region, and is willing to drop rates to fill its planes.
Two newcomers are preparing to take to the skies soon: Singapore Airlines' (SIA) Tiger Airways, a joint venture with the Ryan family that started Europe's largest LCC, Ryanair Holdings; and Qantas Airways' Jetstar Asia.
“We are the lowest cost airline in the world and we believe that we will always continue to dominate the market. “We are competing against big airlines like Thai Airways, Cathay Pacific and SIA,'' Fernandes said, adding that many airlines had tried and failed in the low-fare market.
========================================
Bloomberg
Singapore's Valuair to Add Two Aircraft to Meet Rising Demand
July 29 (Bloomberg) -- Valuair Ltd., a Singapore-based discount airline, plans to lease two aircraft this year to double the size of its fleet so it can add more routes in Asia, where cheaper airfares have spurred travel demand.
The airline plans to lease two A320 aircraft made by Airbus SAS, adding to the two A320s it already has, chairman Lim Chin Beng said. The new aircraft will be available by the end of the year, Lim said, without giving more details.
"With just two aircrafts it will be too difficult to be operating in an economy of scale,'' he said, in a televised interview at the Asia-Pacific Economic Cooperation forum's transport ministers' meeting in Bali, Indonesia.
Valuair, which began flying in May, needs to expand to compete effectively with the increasing number of low-cost airlines being set up in Southeast Asia. There are as many as eight discount carriers in the region, including Malaysia-based AirAsia Sdn. and Tiger Airways Ltd.
The A320 aircraft can seat up to 150 passengers and can fly a maximum range of 3,000 nautical miles. Valuair uses its two current A320 planes for flying to Hong Kong, Bangkok and Jakarta from Singapore. A new A320 plane carries a catalogue price of $63 million. Valuair leases its two A320 planes from Singapore Aircraft Leasing Enterprise. Lim declined to give additional details of Valuair's plans for the new leases.
Valuair is also facing competition from regular-service airlines like Singapore Airlines Ltd. and Cathay Pacific Airways Ltd., which are cutting their prices. Singapore Airlines, the world's second-largest carrier, now offers a return ticket to Bangkok for three-quarters Valuair's fare, Lim said.
Even with the price war, Lim, a former Singapore Airline managing director, said Southeast Asia's air travel market -- with a combined population of 500 million in the region -- is big enough for more budget carriers.
With cheaper fares, "people will travel more often,'' Lim said. "There's a tremendous potential. We haven't even scratched the surface for demand.''
===========================================