Malaysia's AirAsia prepared for price war with rival ValuAir
Malaysia's AirAsia prepared for price war with rival ValuAir
Agence France-Presse
Kuala Lumpur
Malaysian no-frills carrier AirAsia is prepared for a price
war with Singapore's first budget airline, ValuAir, to protect
its market share, a report said on Thursday.
"We have said that when we have more competition, we will just
have to lower our price ... we can go very low. That's the only
formula we know," AirAsia chief executive officer Tony Fernandes
was quoted as saying by the Business Times.
Fernandes was commenting on ValuAir's announcement Wednesday
that it will begin twice-daily flights to Bangkok from Singapore
on May 5.
ValuAir is offering a promotional round-trip fare to Bangkok
for S$138 Singapore (US$82) but the deal ends on May 21 and it is
not clear how much flights would cost after that.
"Our fares are still lower," said Fernandes.
AirAsia already flies twice-daily from Singapore to Bangkok
through its joint venture Thai AirAsia Ltd. A one-way ticket
starts from S$59.99 Singapore.
"Singapore-Bangkok is the most competitive route (in the
region). There are 12 airlines already operating the route,"
Fernandes said.
"As long as we offer passengers low-cost flights, I believe we
will have a market," he said.
On the status of AirAsia's application for a license to set up
base in the city-state, Fernandes said: "I don't think we are
going to get it. I think we will be last on the list (of the
Singapore authorities' considerations)."
ValuAir, started by former Singapore Airlines managing
director Lim Chin Beng, beat a host of rivals to become the first
budget airline to base itself out of Singapore.
A Singapore Airlines-backed consortium called Tiger Airways
and an as-yet unnamed no-frills carrier involving Australia's
Qantas airlines also intend to operate from Singapore.
AirAsia, started in 2001, initially served the Malaysian
market but has rapidly expanded regionally in recent months with
intra-Thailand flights as well as the Singapore-Bangkok route.