Meeting on airline price war

KUALA LUMPUR: Transport Minister Datuk Ong Tee Keat will meet representatives from MAS and AirAsia to ensure the price war between the two airlines does not harm the local aviation industry.

Ong said he would also personally look into claims by AirAsia group chief executive officer Datuk Tony Fernandes that MAS was using subsidies for international flights for its domestic low-fare promotions.

“I will find out more details about the subsidy and the validity of the subsidy,” he said.

Ong said any negative statements by either party would affect the aviation industry.

He said he would meet both parties but stressed that the meeting should not be seen as him meddling into the airlines’ business models.

“It is my duty to ensure that whatever happens now won’t affect the industry negatively,” he said.

Ong hoped the two airlines would keep competition healthy.

Meanwhile, Wangsa Maju MP Wee Choo Keong said the Government should not interfere in the aviation industry.

He said that Singapore Airlines was allowed to have a low-cost carrier but MAS was not allowed to.

“Why must the Government be so protective of AirAsia? Competition is always healthy and the public will benefit from competition,” he said.

Wee had submitted a parliamentary question to Ong on why MAS was not allowed to operate a low-cost service, thus allowing AirAsia to monopolise the low-cost aviation industry.

In a written reply, Ong said MAS had never proposed to conduct its operations as a low-cost carrier.

“The Government also had not received any applications from other companies wanting to be low-cost carriers,” said Ong.

Ong added in the reply that under the domestic rationalisation policy in 2006, MAS had been designated as a full service carrier while AirAsia would operate as a low-cost carrier.

Meanwhile, MAS managing director and chief executive officer Datuk Seri Idris Jala will not participate in the public debate suggested by AirAsia.

“I do not have the time, nor the interest, to indulge in such futile exercises when there are other priorities that I need to attend to,” he said, in response to the challenge thrown by AirAsia’s chief executive officer Datuk Tony Fernandes.

Idris also said that AirAsia had been giving away free seats for years without any protest by MAS.

Idris also denied the accusation by Fernandes that MAS was using international subsidies to fund its Everyday Low Fares.

On the contrary, Idris pointed out that AirAsia had been given various forms of subsidies including initially zero and subsequently lower airport charges as well as funding of its brand on the English Premier League referees, not to mention outstanding amounts owed by AirAsia/FAX to MAS and Penerbangan Malaysia.

(The Star)