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ASEAN
Open Skies/Aviation
July 18, 2007

Fast-tracking could benefit Singapore
A fast-tracked open skies agreement within Southeast Asia could benefit Singapore, the Malaysia Airlines chief was quoted as telling state news agency Bernama on July 18.

Managing director Idris Jala said Malaysian carriers are not ready to operate under a fully liberalised environment if implementation of the Association of Southeast Asian Nations’ (Asean) open skies policy is brought forward from January 1, 2009, AFP reported.

"We need more time. If you do it earlier, I don't believe that Malaysia will win but in fact I think Singapore will be the winner in all this," Jala said, quoted by the state Bernama news agency.

"We would continue to make the changes so that we will be ready by January 2009," he said.

Malaysia has not ruled out the possibility of implementing the policy earlier for several routes, Transport Minister Chan Kong Choy was quoted as saying on July 17 by Bernama.

"We are prepared to look at it, as it is not a total liberalisation of the Asean aviation route map. However, we need to talk to many parties because we cannot make a unilateral decision. It is a bilateral issue," Chan said.

An open skies policy is an aviation principle that allows a foreign airline to operate unlimited services to another country. The Asean agreement would initially apply for routes between Asean capitals and would later expand to other cities.

Malaysian-based budget carrier AirAsia has been among the most vocal in campaigning for access to the Singapore-Kuala Lumpur route dominated by Singapore Airlines and Malaysia Airlines.

The two flag carriers account for 85% of traffic on the short sector between the two cities. A confirmed round-trip ticket departing from Singapore costs around 450 Singapore dollars (US$298) including taxes.

In another development, Malaysia Airlines will resume flying rural routes after agreeing to take them back from current operator Fly Asian Express (FAX), an affiliate of budget carrier AirAsia.

But Jala said Malaysia Airlines will not pay the 40 million ringgit (US$11.6 million) bill to repair the fleet of Fokker 50s and Twin Otter turbo-propeller planes it will use for the rural air services.

"It is between FAX and the government to pay for the 40 million ringgit bill. I don't know what their arrangements are and certainly not all of the aircraft will be operational by October 1," Jala said.

FAX has been operating the rural air services but in March it asked to be relieved of the service to focus on its new long-haul low-cost services which are planned to start in September.

Malaysia Airlines agreed to resume the rural routes but said the turbo-propeller planes must be in "the same operational condition" as when the national carrier handed them over to FAX in August last year. FAX has questioned the independence of the firm which conducted an audit of the aircraft.

FAX was founded by aviation tycoon Tony Fernandes, who launched regional budget carrier AirAsia more than five years ago. AFP

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