Malaysia Airlines hopes for peace with AirAsia

Malaysia Airlines hopes for peace with AirAsia

Agence France-Presse, Kuala Lumpur/Malaysia

National carrier Malaysia Airlines is willing to work with its no-frills competitor AirAsia for mutual benefit, signalling a possible end to months of bitter rivalry, a report said on Sunday.

"Of course we can work with AirAsia where it is mutually beneficial," Malaysia Airlines chairman Munir Majid was quoted as saying in the New Sunday Times.

"No problem. If there is, let us not exaggerate it, as that is not a good start for looking into possibilities of cooperation," Munir said.

Malaysia Airlines provided training facilities for AirAsia pilots and engineering maintenance facilities, he said. "If we had wanted to throw a spanner in the works, we could have asked them to do all this at some costly foreign locations."

AirAsia, regarded as the region's no-frills pioneer, has criticized its rival's plans to launch a budget carrier with other regional airlines and called for a chance to work together to turn the country into a regional low-cost aviation hub.

Malaysian Transport Minister Chan Kong Choy has in the past called on the national carrier to cooperate with AirAsia instead of pursuing its own plans.

Malaysia Airlines' Munir pointed out the budget aviation sector was different from the Malaysia Airlines full service model.

"Even if Malaysia Airlines were to set up its own LCC (low- cost carrier), it can only be run successfully by a management oriented to and experienced in the budget airline business," Munir said.

However, Munir disagreed with AirAsia's proposal to turn the old unused terminal in Subang into a no-frills aviation hub, saying it "would spell the end of any hope of developing Kuala Lumpur International Airport (KLIA) into a meaningful aviation hub".

From its humble beginnings with just two Boeing 737-300 jets in 2001 plying Malaysia's domestic routes, AirAsia has expanded at a furious pace. It now flies to 30 destinations in Malaysia and the region, including neighbouring Singapore, Thailand, Indonesia and Macau and hopes to fly to China by year-end.

AirAsia expects to carry about 7.5 million people in 2005 after six million in 2004. It plans to expand its fleet to 26 next year from the current 18 and acquire 80 new aircraft in the next four to eight years.

The budget carrier recently gained full regulatory approval for its initial public offering and will issue 700.51 million shares in what is expected to be the country's largest listing this year.

AirAsia also has a 49-51 joint venture low-cost airline in Thailand with Thai telecoms giant Shin Corp. owned by the family of Thai Prime Minister Thaksin Shinawatra.