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SINGAPORE: Singapore and Malaysia have agreed to expand their bilateral air services agreement and low-cost carriers will soon be allowed to operate between Singapore and Kota Kinabalu, Kuching and Miri in East Malaysia.
The news comes as such carriers in Singapore gear up for increased competition from December 1 when the highly lucrative Singapore-Kuala Lumpur air space fully liberalises.
Low-cost carriers have seen strong demand for budget travel between Singapore and Kuala Lumpur since they started flying between the two cities in February. With more liberalisation on the way, these airlines are not putting the brakes on expansion plans any time soon.
Steve Burns, chief operating officer, Tiger Airways, said: "We've been flying the KL route for eight months or so, and we've been doing well on that. But we have been restricted to fly once a day, and we're really looking forward to offering five times more flights on this route."
This works out to nearly half a million seats a year or 1,315 seats a day. Tiger Airways said it will target first-time air travellers.
"We are not there to compete against other airlines' high fares or low fares, rather to create our own market so that we have 100 per cent market share of Tiger Airways market, which is a very distinct business model and has a very distinct customer segment," said Mr Burns.
Meanwhile, other budget carriers are also adding more flights. Malaysia's AirAsia will fly four more daily flights between Singapore and KL, bringing its total number of flights to six each day.
Singapore-based Jetstar Asia is increasing its flights between the two cities from seven to 19 a week. This works out to 974 seats a day. The company is aiming to grow its network through transit passengers from the region.
Chong Phit Lian, CEO, Jetstar Asia, said: "We do see increasing number of passengers travelling via Singapore to Hong Kong, Taipei and even to Bangkok. They come in through our Valuair flights from Jakarta, Medan or Surabaya."
In a bid to attract more passengers, Tiger, Jetstar and AirAsia have started to offer zero-dollar fares on their Singapore-KL flights. This is likely to push other full-service carriers to lower fare prices even further.
- CNA/so
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