Putrajaya tells airlines to set reasonable fares as the economy recovers from COVID-19

Putrajaya tells airlines to set reasonable fares as the economy recovers from COVID-19

FILE PHOTO: Men watch Malaysia Airlines aircraft at Kuala Lumpur International Airport in Sepang, M
Men watch Malaysia Airlines aircraft at Kuala Lumpur International Airport in Sepang, Malaysia, in this picture taken March 2, 2016. (File photo: Reuters/Olivia Harris)

SINGAPORE: Malaysian Transport Minister Wee Ka Siong has urged commercial airlines in the country to reduce their fares amid growing concerns that COVID-19 has made it too expensive for many people to fly.

In a Facebook post on Monday (Jun 22), Dr Wee said that he held a meeting with the country’s three biggest airlines - Malaysia Airlines, Air Asia and Malindo Air earlier in the month to discuss the recovery of the aviation industry. 

He noted that the airlines “must now begin to reduce their airfares and increase flight frequencies” in line with the relaxation of social distancing rules for scheduled and non-scheduled passenger flights.

“Moving forward, the Government has reminded the airlines to set reasonable price levels that would not unduly burden air travellers for work or otherwise, during this time of national recovery from the pandemic,” said Dr Wee.

Wee Ka Siong (1)
MCA President and Ayer Hitam MP Wee Ka Siong. (Photo: Bernama) 

He had earlier confirmed that airlines were no longer required to enforce compulsory social distancing during flights as the nature of air travel makes it easier for authorities to perform contact tracing should the need arise.

READ: COVID-19: Safe distancing on aircraft and higher ticket prices could be 'new normal' for industry, say analysts

PRICES FOR SOME AIR TICKETS HAVE TRIPLED 

Dr Wee’s statement came as many travellers expressed concern over what has been regarded as pricey tickets for domestic flights.

Finance executive Kimberly Chan, who is based in Kuala Lumpur for work but visits her family in Kota Kinabalu in Sabah, told CNA that she has not seen her family since Chinese New Year in January as she cannot afford the price of a return air ticket.

When COVID-19 hit Malaysia, the government imposed the movement control order (MCO) from Mar 18, restricting Malaysians from being able to travel across state boundaries. 

Ms Chan, 31, has been living in Kuala Lumpur as the COVID-19 pandemic hit Malaysia as she works at an accounting firm based in the capital city.

When Malaysia entered the recovery phase of the MCO from Jun 10, people were again allowed to travel to different parts of the country for work or leisure.

However, some travellers, like Ms Chan, has discovered that air travel is no longer a viable option as the prices of air tickets have become unaffordable.

Ms Chan noted that the average price of a return air ticket from Kuala Lumpur to Kota Kinabalu now costs between RM600 (US$140) and RM800, triple the price she usually pays.

“I really miss my mom and dad because I usually visit them once every three months,” said Ms Chan.

KLIA AirAsia
An AirAsia staff member wearing a face shield attends to passengers at the check-in counter at the Kuala Lumpur International Airport 2 in Sepang. Malaysia on Apr 29, 2020. (Photo: AFP/Mohd Rasfan)

FLIGHTS OPERATING BELOW BREAK-EVEN POINT: ANALYST

Despite the government's call, Mr Shukor Yusof, founder of aviation consultancy Endau Analytics, told CNA that the prices of airfares will likely remain high in the short term. This is because the aviation sector has only just begun its long road to recovery from the COVID-19 pandemic.

He noted that airfares are market-driven and largely based on supply and demand factors and these include passenger demand, the economic situation, costs of fuel and operations.

“The economics of flying domestically in Malaysia is still considerably expensive given that the revenue from passengers is still unable to break even for every single flight. Each flight is operated losing money,” said Mr Shukor.

READ: Malaysia's tourism industry braces for long road to recovery despite the resumption of interstate travel

He also highlighted that with COVID-19, airlines have to ensure that the aircraft is disinfected after each flight and this means that it would be difficult for flights to do a quick turnaround and fly again. This impacts the number of flights airlines can mount in a day.

“Then every time you complete a flight, the aircraft needs to be disinfected, and this means deep cleaning. And in business, time is money and you can’t save time here because you need to ensure that the process is completed thoroughly,” he added.

In his Facebook post, Dr Wee acknowledged that airfares also depend on the timing of the purchase.

“For instance, flight tickets purchased close to departure dates will be more expensive compared to those bought much earlier. It is recommended for travellers to plan their flights ahead of time to enjoy lower fares,” he wrote.

AIRLINES INTRODUCE OFFERS TO ATTRACT PASSENGERS 

Meanwhile, some airlines have introduced offers that will allow passengers to pay less for tickets. For instance, Malaysia airlines announced last Friday that it has extended its enhanced Economy Class flexible fare options across its entire network, except for flights from Malaysia to Japan, or the Saudi Arabia cities of Jeddah and Madinah.

The fare options - Lite, Basic, Flex - were previously limited to domestic, Southeast Asia and South Asian flights.

Although this does not impact the prices of air tickets for domestic flights, it will offer viable options for passengers who travel to most international destinations.

Budget airline Air Asia told CNA that it has partnered with local hotels to offer a new flight and hotel combination booking platform called SNAP.

AirAsia Penang
Passengers speak to a worker wearing a protective face mask and gloves as they check in for a flight at Penang International Airport in Malaysia, Apr 29, 2020. (Photo: AFP/Goh Chai Hin)

The airline said SNAP “brings direct benefits to consumers with greater convenience, bigger savings and value-for-money packages, further accelerating the recovery of domestic tourism".

The airline’s spokesperson told CNA that it remains committed to deliver on its mantra to allow everyone to fly affordably.

“Low fares and great value are the linchpins of our model and that won't change post COVID-19. The key to securing the best value deals with AirAsia is to plan ahead and book early. Airfares increase in general, as demand increases, which is usually closer to the travel date,” the spokesperson said.

However, Mr Shukor of Endau Analytics warned that it could be some time before demand for air tickets will return to pre-COVID-19 levels, as the economy has impacted jobs and income of many Malaysians.

“People will now only fly when it is necessary. Discretionary leisure travel is linked to the economy. If people are earning less, or not even earning, you can forget about flying,” he said.

“Overall, there’s going to be a big reduction in traffic numbers as compared to previous years,” Mr Shukor added.

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Source: CNA/am

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