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KUALA LUMPUR : Malaysia's transport minister said on Thursday he would try to resolve a cut-throat fare war between the national carrier and budget airline AirAsia, whose founder has complained of unfair competition.
Malaysian Airlines said Wednesday it would give away fares weekly to 20 Asian destinations, prompting criticism from Air Asia's founder Tony Fernandes since the government subsidises some of the national carrier's international flights.
Both Malaysian Airlines and Air Asia had earlier announced similar offers for domestic flights, even though soaring oil prices and a slowing global economy are squeezing the aviation industry.
"I personally will step in to investigate," Transport Minister Ong Tee Keat told the official Bernama news agency. "I should talk to both of them at this juncture to find out exactly what went wrong."
He said he had "no qualms about healthy competition" but that conflicts between operators should be minimised.
However, Fernandes has argued that Malaysian Airlines enjoys government backing.
"The government will never allow MAS (Malaysian Airlines) to fail but a private company? Who is going to save us?" the New Straits Times quoted Fernandes as asking.
"I'm not against competition but it has to be a level playing field. You can't send me into a boxing match with one hand tied behind my back," he said, referring to issue of the government subsidy.
AirAsia also wants to be given equal rights to fly the Singapore-Kuala Lumpur air route, one of the region's most lucrative connections. Malaysian Airlines currency has many more flights on that route.
Earlier Thursday, AirAsia X, a sister company of budget-carrier Air Asia, launched a new six-weekly service between Perth and Kuala Lumpur starting November 2, the airline said in a statement.
The airline said it planned to launch flights to Britain in the fourth quarter of 2008, with London and Manchester being considered. It is also eyeing more destinations in China as it expands its network. - AFP/de
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