Thursday May 15, 2008
AirAsia raps MAS over deals
KUALA LUMPUR: The battle between the two local carriers AirAsia and Malaysia Airlines has turned up a notch after waging their fare wars.
Yesterday, AirAsia called on Malaysia Airlines to keep the competition fair and healthy and “not to take toys from its playground.”
Its group chief executive officer Datuk Tony Fernandes also questioned yesterday why MAS was not promoting zero fares for non-AirAsia routes such as London and Sydney, to give more options to customers.
He also challenged MAS managing director and chief executive officer Datuk Seri Idris Jala to publicly deny or accept allegations that subsidies for international flights were used to promote domestic low-fare promotions.
“Idris has not denied this openly. You cannot take subsidies and use it to promote zero fares.
“Subsidy, in any form, is dangerous if it causes predatory pricing. We also believe MAS received free subsidy to fund free trips to Europe,” he said.
Fernandes said while it was difficult for an entrepreneur to go up against a government-linked airline like MAS, a level playing field would keep things fair and balanced.
“Why are they only concentrating on our routes? MAS is turning into a low-cost carrier instead of being the premium airline it was set up to be.
“This fighting is ridiculous. We should be competing against foreign airlines,” said Fernandes, who challenged Idris to a public debate on the matter.
Later, MAS executive director and chief financial officer Tengku Datuk Azmil Zahruddin denied that international flight subsidies had been diverted to fund the national carrier’s Everyday Low Fares product.
He said that “there was no such thing” and that the statements were baseless.
“There is no such thing as diverting our international flight subsidies into funding our low fare product.
“Each international and domestic route stands on its own and is subject to its respective profit and loss (P&L) mechanism,” he said.
Tengku Azmil also acknowledged that AirAsia had accused the national carrier of “tying the hands” of the budget carrier, but stressed that MAS was not competing with them.
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