Crossing the region’s skies freely

Travel News July 27th, 2009

SINGAPORE, July 27 — The impressive traffic growth that has come with the liberalisation of the Singapore-Malaysia air sector demonstrates the potential for a similar outcome throughout Asean, said Singapore’s Transport Ministry (MOT).

Following eight years of consecutive decline, traffic on the Singapore-Kuala Lumpur route grew 12 per cent last year, compared to the year before.

In December 2008 — one month after low-cost carriers started flying between Singapore and Sabah/Sarawak — air traffic between Singapore and Kuching doubled, compared to the same month in 2007.

The Singapore-Kota Kinabalu route grew 153 per cent during the same time, said MOT’s spokesman, adding: “The benefits of Singapore-Malaysia air services liberalisation are resoundingly clear.”

The expansion of air links between the two countries is part of a wider initiative towards Asean-wide free skies.

Last year, transport ministers of the 10 member states agreed on a long-term road map that will see the creation of an Asean Single Aviation Market by 2015.

When that happens, all carriers of member states will be able to criss-cross the region’s skies without any restrictions.

Despite the agreement, sceptics say it will be tough to realise the goal.

For Singapore, the position is very clear. The MOT spokesman said: “Singapore has always adopted a pro-liberalisation aviation policy. This is because increased air links will increase the flow of tourists, investments and trade to the benefit of both Singapore and its partner’s economy.” — The Straits Times

Travellers to Malaysia ditch buses for planes

Travel Info July 27th, 2009

SINGAPORE, July 27 — Businessman Andy Bhasin has dumped buses for airplanes.

“I don’t think I will ever take the bus again,” declared the 45-year-old who zips between Singapore and Kuala Lumpur once every two months.

Andy and thousands others like him are reaping the benefits of what some would say is a revolution in air travel — the combination of liberalisation of Singapore-Malaysia air links, and the boom in the low-cost carrier segment.

You can now fly more cheaply, more frequently and to more destinations than ever before. The changes are most apparent to frequent travellers between Singapore and KL.

Before budget airlines entered the market on Feb 1 last year, travellers were paying over S$400 (RM960) for the return 45-minute sector, which had been dominated for more than three decades by Singapore Airlines and Malaysia Airlines (MAS).

Fares have since tumbled to as low as S$60, including taxes and other charges.

From just one destination and 56 to-and-fro flights a week, Jetstar Asia, Tiger Airways, AirAsia and Firefly (a subsidiary of MAS) now operate more than 450 flights between Singapore and nine points in Malaysia: KL, Subang, Kota Kinabalu, Kuching, Langkawi, Penang, Ipoh, Kuala Terengganu and Kuantan.

Coming up in the next few months: Miri, Tawau, Malacca, Kota Baru and Alor Star.

Before the skies opened, Changi was connected to just five cities in Malaysia.

With all the extra flights, the number of weekly flights between the two countries has more than doubled from 334 in December 2007 to about 760.

The Singapore-KL sector, served by 11 airlines, is the busiest out of Changi Airport, with 498 flights both ways a week.

This far outstrips the 360 weekly flights between Singapore and Jakarta, and 262 serving the Singapore-Bangkok market.

Apart from competition pulling fares down, the economic crunch, which has hit demand for air travel, is also forcing airlines to slash charges to lure travellers.

With Singapore-Malaysia air fares costing about the same as a bus ticket, it does not make sense to hit the road, said Eric Lau, 32, a teacher. “Now I fly all the time,” said the Malaysian, whose home is in Alor Star. “A bus just takes too long. Singapore to Kedah is 12 hours and to Penang, it is 10 hours.”

Low-cost carriers may have snatched some business away from cross-border coach companies like Transtar, who say business has dropped by about 20 per cent to 25 per cent, but the pie has also grown with more first-time travellers taking to the skies and people making more trips.

Despite the economic downturn that has hurt the air travel industry, data obtained from Changi Airport Group show that passenger traffic between Singapore and Malaysia hit about 270,000 in May.

This is a jump of about 25 per cent compared to the same period last year.

Singapore is Malaysia’s top tourist-generating market, contributing about half of total arrivals, said Tourism Malaysia’s acting director-general Amirrudin Abu. Between January and June, the country received more than six million visitors from Singapore.

Liberalisation of the air links has been good for the tourism sector and is expected to boost business even further going forward, Amirrudin said.

It is not just KL that has benefited. Travel to the other destinations such as Penang, Kota Kinabalu, Kuching, Ipoh, Kuala Terengganu, Kuantan and Malacca will also get a boost, he added.

With more air links between the two countries, the Singapore Tourism Board’s regional office in KL has also been stepping up its marketing efforts in Malaysia, said its executive director for communications, HR and organisational development, Muhammad Rostam Umar.

This is especially so in newly linked or soon-to-be-linked destinations such as Ipoh and Kuantan.

While liberalisation has been great for tourism and the flying public, the competition as well as the general business slowdown has hit both SIA and MAS where it hurts. Loads and yields have dropped.

SIA spokesman Nicholas Ionides said: “The challenge is not only to retain market share but also to grow the market.”

Both airlines are fighting back with aggressive promotions and deals to lure travellers. MAS which recently ended a S$49 one-way Singapore-KL promotion, is now in the thick of an eight-week marketing campaign in Singapore.

SIA’s regional arm SilkAir is offering round-trip tickets for S$166.

With the price gap still hard to bridge, low-cost carriers are finding the economic crunch on their side. Companies have cut travel budgets and executives are downgrading from business to economy class, or from full-service to low-cost airlines.

Eric Ang, a chief operating officer in an electronics firm who flies to KL once a month, is one of them.

Once a regular on SIA flights, he said: “I am now a convert to budget flights.”

While full-service airlines may offer a higher level of service, comfort is not an issue for such a short flight, he said.

To cater to the growing demand for budget flights, American Express recently added AirAsia to its list of partner carriers — its first such tie-up with a low-cost carrier. It means people can pay for AirAsia flights using their Amex cards.

Peter Kapoor, Amex’s regional vice-president of merchant services, said: “Within our customer base, there are corporations that find budget carriers relevant, given the current economic recession and the recent opening up of more shuttle flights between Singapore and Malaysia.”

AirAsia’s regional commercial head Kathleen Tan said that in the first month alone, there were 30,000 transactions by Amex members. “I’ve seen general managers, managing directors and other top business executives on our flights. Our extensive Asean network with hubs in Malaysia, Indonesia and Thailand is attractive for companies because it makes travel within the region very convenient.”

Jetstar Asia and Tiger Airways are also serving an increasing number of corporate customers.

To tap into the business market, Jetstar has tailored its product to suit companies’ needs. For example, it lets corporate fliers pay for flights monthly instead of by the trip, and offers a complimentary itinerary change not offered to other fliers. In just a year, the airline has grown its base of corporate clients from just 25 to almost 400.

So, at a time when full-service airlines are cutting capacity to cope with falling demand, the low-cost carriers are making plans for even more flights.

Tiger Airways, which has 56 aircraft on order for delivery from now until 2016, is already in discussions with several airports in Malaysia to start new services, spokesman Matt Hobbs said, without naming the airports.

Jetstar Asia, which is 49 per cent owned by Australia’s Qantas, will add a second daily flight to Penang from October, said its spokesman, adding: “Singapore-Malaysia is a vital market not just for Jetstar Asia but for the broader Jetstar and Qantas network.”

Qantas has benefited from Jetstar’s entry to the lucrative Malaysian market. A traveller needs just one ticket to fly, say from Sydney to Singapore on Qantas, and Singapore-KL on Jetstar Asia. The spokesman said: “The interline agreement is now opening up the Malaysian market to the broader Qantas network which currently does not have direct access into this market and represents an enormous opportunity which we are only just beginning to take advantage of.”

AirAsia’s Tan said: “The Singapore-Malaysia market is huge and there is still so much potential for further growth and expansion. Low-cost carriers are just starting to scratch the surface.”

For avid traveller Lim Hui Ling, who works in a statutory board, the more flights the better. The 27-year-old, who travels to Malaysia frequently, said: “Now I can visit my friends in KL over the weekend, without taking six hours to go up and six hours to come down.

“I can go places I did not think of going to previously. For example, Firefly can connect me to Redang via Terengganu. Before, when there were only buses, it was very restrictive. Travelling to Malaysia has become so much more convenient.” — The Straits Times

Singapore-Malaysia air route soaring

Travel News June 25th, 2009

KUALA LUMPUR, June 25 — Despite a grim outlook for the global aviation industry, airlines plying the Singapore-Malaysia route remain upbeat about their prospects.

While carriers around the world are suffering, the Singapore-Malaysia sector is enjoying a boom, with several airlines set to expand and increase flight frequencies from next month.

Air services between Malaysia and Singapore have hugely increased this year, and many more flights are due to be launched from Singapore to various towns in Malaysia.

You would forgive AirAsia — the airline running the most number of flights between the two countries — if it should start to feel nervous as yet another player, Malaysia Airlines subsidiary Firefly, enters the market next month.

The newcomer will be the seventh carrier to fly the much-coveted Singapore-Malaysia sector.

But AirAsia chief executive Datuk Tony Fernandes said he was confident about the airline’s staying power.

“I am not concerned about Firefly. It is not an arrogant statement,” he told The Straits Times in an interview.

He explained that both airlines are different and reach out to different target markets.

Fernandes said he believes that Firefly, which operates smaller turboprop aircraft and flies from Subang — nearer to the city centre than Sepang, site of Kuala Lumpur’s low-cost carrier terminal — is unlikely to offer airfares lower than AirAsia’s.

“We’re also different from other airlines (like Malaysia Airlines and Singapore Airlines),” he added.

As AirAsia is a budget airline, he said, a passenger has to pay for meals, entertainment and even checking in a suitcase.

And those who have flown its long-haul carrier AirAsia X to Britain or Australia will know that the seats do not recline.

But these quirks do not seem to deter many passengers. Fernandes said passenger numbers have gone up and that plane loads average out at around 82 per cent.

Despite the industry’s glum fortunes regionally, AirAsia recorded net profits of RM203.2 million for the first quarter, compared with RM161.3 million a year earlier.

The opening up of the Singapore-Malaysia sector has been a boost. Fernandes estimates that 52 per cent of his passengers for the Singapore-KL route are Singaporeans.

And the Singapore-KL route is almost always nearly full, with an average load factor of more than 70 per cent, according to Kathleen Tan, AirAsia’s regional commercial head.

“The KL-Singapore route has been neglected for so long. It’s one of the few routes that has been in decline, so I think there’s enough for all of us,” said Fernandes, adding that the economic outlook for the route was “very good”.

He has never been wrong yet. He rose to fame after he turned around an ailing government- owned carrier into the success story that is now AirAsia.

Like AirAsia, its rival Tiger Airways also feels the sector is lucrative. It is keen to expand further later this year and is in discussions to launch new routes.

Its head of corporate communications Matt Hobbs said: “For the low-cost airlines, the market is certainly seeing growth and stable demand.”

Jetstar Asia also did not seem too worried about increased competition. Its Asia commercial head, Leslie Ng, said: “Our performance between Singapore and Malaysia remains strong.”

He cited a threefold increase in the number of passengers this month compared to the figure in the same period last year.

But analysts warned that a saturation point may soon be reached.

Azrul Azwar, a senior economist with Bank Islam, said that while the sector was still unaffected by the recession, he warned that it will reach a saturation point. “There could then be a price war, meaning more margin compression for carriers. But it will benefit passengers.”

Ng Sem Guan, aviation analyst with OSK Research, said: “The KL-Singapore route is a bit overcrowded. But new routes have the potential to grow, though it will take a while to mature.”

Both Air Asia and Air Asia X have removed administration fees on all flights.

Fernandes said yesterday this would lower fares and boost passenger volume.

The move would see a reduction of up to RM43 in ticket prices.

And amid the rosy outlook, at least for his airline, Fernandes promised one creature comfort for his long-haul passengers.

By December, seats in Air Asia X will be able to recline. — The Straits Times

Rajang river cruise set to wow tourists

Travel News June 15th, 2009

SIBU, June 15 – The Rajang, the country’s longest river, is set to become a tourist attraction when the Pandaw Luxury Cruise begins on June 30.

State urban development and tourism minister Datuk Micheal Manyin will officiate the ceremony.

A day after the launch, Sarawak Tourism Board (STB) chief executive officer Gracie Geikie said, a pioneer group of 60 tourists would begin an eight-day cruise along the river and its tributary, the Igan.

There will be three cruises each month and the Irrawaddy Flotilla Company which operates the service, reports it has a full schedule until March next year.

By then, Geikie said, more than 1,400 tourists from the USA, Australia and Europe would have visited the state’s central region comprising Sibu, Kapit, Sarikei and Mukah divisions. – Bernama

Firefly starts Singapore routes on July 1

Travel News June 5th, 2009

fireflySINGAPORE, June 4 — Firefly, the low cost carrier of Malaysia Airlines, will make its first entrance into Singapore skies come July 1, and soon after that will introduce four more new routes one after another.

On that date, Firefly will operate the Singapore-Subang flight and barely two weeks later on July 12 the carrier will introduce the Singapore-Ipoh route, followed by Singapore-Terengganu (July 14), Singapore-Kuantan (July 22) and Singapore-Melaka (Sept 1).

Firefly’s Managing Director Eddy Leong who announced the commencement of the flights at a reception for the local media and travel industry here tonight said the new routes from Singapore into Malaysia would further strengthen Firefly’s network focusing on commuters for business and leisure travellers.

Firefly’s maiden flight will depart Skypark Subang terminal, previously known as the Sultan Abdul Aziz International Airport at 7.50 am and arrive at the Singapore Budget Terminal in Changi 9.05 am.

The Singapore-Subang route will operate four times daily, the Singapore-Ipoh and Singapore-Kuantan four times weekly, and the Singapore-Kuala Terengganu and Singapore-Melaka three times weekly.

The airline is now offering an introductory promotional all-inclusive one way fare from S$31 (RM75), which is already available for booking for travel from now till October 24 this year, on its website www.fireflyz.com.my. – BERNAMA