SIA may pull out from KL-Singapore route

December 5, 2009
Singapore Democrats

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Bernama

The emergence of low-cost airlines on the Kuala Lumpur-Singapore route has eroded the market of traditional airlines, with Singapore Airlines (SIA) expected to either reduce its capacity or pull out from the route.

According to an industry source, SIA could also hand over its capacity to sister airline Silk Air, just like it did for the Penang route.

SIA and Silk Air have been flying four times daily each on the Kuala Lumpur-Singapore route since December 2008.

Budget competitors on the route include AirAsia and Tiger Airways.

An analyst when asked to comment on SIA’s possible move said it was not a surprise with the presence of low-cost carriers.

“It is reasonable to expect SIA to even cut off the Kuala Lumpur-Singapore route if it is not going to be profitable for them,” he said today.

But he said the airline’s presence would still be felt on the route as it has a 49 per cent stake in Tiger Airways.

He noted that this could also prompt Malaysia Airlines (MAS) to undertake the same measure and allow its own community airline FireFly to take over.

Firefly has a four times daily flight frequency that is targeted at the business community while MAS has an average of six daily flights to Singapore.

“SIA is known as one of the most profitable and cost-efficient airlines in the world, and if they cannot survive at some point, it makes for a good argument that MAS should also reduce its frequency there,” the analyst said.

However, an SIA spokesperson when contacted said the airline at this stage has no plan to withdraw from the Kuala Lumpur-Singapore route.

http://www.nst.com.my/Current_News/NST/articles/20091204211455/Article/index_html