Early liberalisation will hurt recovery plan: MAS
Malaysiakini
Sep 29, 2006

Loss-making Malaysia Airlines (MAS) warned that its recovery plan could be derailed if the government advanced the liberalisation of the aviation industry before 2008.

"Our turnaround plan was conceived to coincide with the (Association of Southeast Asian Nations) roadmap and an earlier liberalisation will set us back as we do need time to turn around," Idris Jala, the carrier's chief executive was quoted as saying by the Wall Street Journal.

Idris, a former senior executive with Shell Refining Co (Malaysia) Bhd, also said he expects the price of jet fuel to continue to fall because there is no shortage of supply.

Malaysia Airlines launched a RM4 billion turnaround plan in March after it posted a RM1.3 billion annual loss for 2005.

The plan aims to trim losses this year to RM620 million before the company turns a profit of RM50 million in 2007 and then posts record earnings of RM500 million in 2008.

Open-skies policy

In August, Transport Minister Chan Kong Choy said some Southeast Asian countries are considering bringing forward an open-skies agreement due to be implemented in the region by 2008.

An open skies policy is an aviation principle that allows a foreign airline to operate unlimited services to another country.

The Kuala Lumpur-Singapore route, a cash-cow for MAS and Singapore Airlines, is in the sights of Tiger Airways, AirAsia and Jetstar Asia, which all promise to offer significantly lower fares.

AirAsia hopes to fly the route as early as next year.

The Kuala Lumpur-Singapore route is one of Asia's most lucrative and fourth-busiest route.

Flag carrier MAS and Singapore Airlines operate more than 200 flights per week on the monopolised route under a 34-year-old bilateral air services agreement. A round trip costs about RM900.