AirAsia complains about landing rights

AirAsia complains about landing rights

Agence France-Presse, Kuala Lumpur

Malaysian budget carrier Air Asia has accused Singapore of discrimination after the city state awarded long sought-after landing rights to a rival Indonesian carrier, a report said on Monday.

The Civil Aviation Authority of Singapore (CAAS) this month granted Indonesia's AdamAir the rights to three daily flights from Jakarta after stalling an application from AirAsia's Indonesian affiliate Awair.

"Suddenly, AdamAir gets the right to fly to Singapore which appears to be a decision that discriminates against us," AirAsia's chief executive Tony Fernandes told the Financial Times newspaper.

A dispute with Jakarta has seen Singapore banning new Indonesian low-cost carriers, but the CAAS said it had given AdamAir the greenlight because it did not "consider the airline a low-cost carrier", based on its operating model.

However, the airline, which offers assigned seats and light snacks, sells tickets to Singapore that are significantly cheaper than full-fare carriers, and Fernandes accused the republic of trying to protect its own low-cost carriers by barring AirAsia.

Singapore "is a country that is supposed to welcome open competition, but they are scared of us" because the city state's own budget carriers are struggling, he said.

While AirAsia reported its net profit for the year to June as 111.63 million ringgit (US$29.6 million), budget airline Tiger Airways, a unit of the state-owned Singapore Airlines, and JetStar Asia, in which the government has a stake, are unprofitable, said the newspaper.

"A bigger presence of AirAsia in Singapore would represent a serious threat to Singapore's low-cost carriers. AirAsia has been able to achieve a successful pricing model that seriously undercuts its rivals," a Hong Kong-based aviation analyst was quoted as saying.

Fernandes said Awair would resubmit its application to fly the lucrative Singapore-Jakarta route, but the CAAS said restrictions on Indonesian low-cost carriers were "still in place".

AirAsia was launched as a budget carrier in December 2001 with just two aircraft and has since become a significant regional player, with its business model increasingly imitated by national carriers and a host of new low-cost entrants.

The airline covers most of the major cities in Southeast Asia, with the carrier's network linking Malaysia, Thailand, Indonesia, Singapore, Macau, Vietnam, Cambodia, Xiamen in China and the Philippines.