AirAsia hits out at Singapore

Jake Lloyd-Smith
Financial Times
2 February 2005

The head of Asia’s largest low-cost airline has accused Singapore’s aviation authorities of being protectionist, alleging they are preventing AirAsia’s Indonesian affiliate, Awair, from serving Changi Airport in a bid to safeguard local no-frills carriers.

“Singapore’s only open when it wants to be open. It’s clearly protecting its own low-fare airlines – Tiger Air and JetStar Asia – and I think that they’ll lose in the long run,” said Tony Fernandes, AirAsia chief executive.

The comments are likely to rile Singapore’s government, which takes pride in what it says is the country’s open and competitive economy. Singapore has also backed the rapid growth of low-cost airlines, with three now operating from the south-east Asian city-state.

“Singapore is the height of efficiency, yet they’ve had our [operations] specs now for two weeks. They’re just being protectionist,” Mr Fernandes told the Financial Times.

Awair – which is 49 per cent held by Malaysia’s AirAsia – had planned to start flying from Jakarta, the Indonesian capital, to Singapore on January 19.

But the service was cancelled at the last minute after the Civil Aviation Authority of Singapore said Awair had not filed the necessary documentation in time, with its final submission handed over late on January 18.

Mr Fernandes said he had no word on when a decision on Awair’s application was due. A spokeswoman for the authority declined yesterday to comment on the timing of the decision.

“They haven’t even given us a date so we’re probably going to cancel the flights – we can live without them,” Mr Fernandes said, adding: “They have more to lose than us.”

Since 2001, AirAsia has pioneered low-cost travel in Asia. It listed on the Malaysian stock market last year to raise funds for an 80-aircraft expansion programme.

Its rapid expansion caught the attention of Temasek Holdings, the main investment arm of the Singapore government, which entered talks to take a stake in Air-Asia last year but was unable to clinch a deal.

Temasek holds a 19 per cent stake in JetStar Asia, a Singapore-based carrier backed by Australia’s Qantas Airways, and 11 per cent of Singapore Airlines’ unit Tiger Airways.

%d bloggers like this: