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PUTRAJAYA, Malaysia - Australia and Malaysia are in talks to open a low-cost air route between the two countries, spearheaded by Qantas-owned Jetstar and AirAsia, Malaysia's transport minister said today.
Malaysia-based AirAsia recently unveiled bold plans to expand its route network to include longer-haul destinations, but the price to secure landing rights in Australia looks like being a reciprocal agreement for Jetstar to share the new business.
"An Australian low-cost operator will be operating (from Kuala Lumpur)," Chan Kong Choy said in an interview.
"We are negotiating now so if things go on fine you can see a low-cost carrier from Australia by the second half of the year." When pressed, Chan confirmed the carrier was Jetstar.
Jetstar could be the first major foreign airline to fly out of Kuala Lumpur's busy low-cost terminal, which is run by Malaysia Airports Holdings and used almost exclusively by AirAsia, the region's largest low-cost airline.
The terminal is expected to handle about 6.5 million passengers this year and is rapidly approaching its current capacity of 10 million passengers less than a year after opening.
Chan said AirAsia wanted to fly to Melbourne's Avalon airport, a low-cost hub for Jetstar.
AirAsia's founder and chief executive, Tony Fernandes, said this month he wanted to double the airline's Airbus A320 fleet to 200 as it looked to expand its service in the region.
He also launched a new low-cost long-haul service, AirAsia X, which would start flying to cities in China, India and Europe from July - a move industry analysts say could hurt local state-controlled rival Malaysian Airline System.
Fernandes, a former music industry executive who founded AirAsia just five years ago, is the entrepreneurial drive behind Malaysia's ambition to develop an aviation hub rivalling Singapore to the south and Bangkok to the north.
One of his biggest desires is to break into the lucrative Kuala Lumpur-Singapore route, currently dominated by Malaysia Airlines and Singapore Airlines, but this depends on open-skies talks under way between officials of both countries.
Chan declined to comment when asked if Malaysia and Singapore were likely to open this route to low-cost carriers this year. The Association of South East Asia Nations plans to open up routes between its capital cities anyway in 2008, but Malaysia says it wants to accelerate this.
"Tiger Airways has expressed very strongly a wish to operate into Malaysia," he said, referring to the Singapore low-cost carrier. Tiger Airways' major shareholder is Singapore Airlines with a 49 per cent stake.
"The Malaysian government is very determined to make Kuala Lumpur a very important aviation hub in this part of the world and by promoting LCC (low-cost carrier) operations, I think we are convinced this is a very good strategy."
- REUTERS
