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