AirAsia Cheap Airfare – A Thing of the Past?

Shares of budget airline AirAsia and owner of FireFly another budget air Malaysia Airlines (MAS) have been halted for two days pending an announcement of share swap between AirAsia and majority share owner of MAS which is also the governments investing arm Khazanah. Early unconfirmed news state that Khazana will swap 20% of MAS shares for AirAsias 20% share with AirAsias mainshare holder Tune Talk.

With this share swap, there is a chance that MAS may disband its budget brand Firefly which operates in KLIA and Subang. Currently Firefly compete fiercely with AirAsia in terms of price.

This news creates unease amongst travellers fearing price hike by AirAsia due to lack of competition.

A quick check on the price of flight from KLIA/LCCT (AA) on Nov 15 returning Nov 23 shows he following:

Air Asia (LCCT) RM201 (basic and not including RM10 of credit card charges, 0KG checked in luggage) with credit charges = RM211

Firefly (KLIA)- RM318.95 (including standard package: RM58x2 -free combo meal, free 20KG checked in luggage, free seat selection on purchase) without standard package = RM202.95

Everything has a price and incentives will be thrown in to induce an entrepreneur to take the bite.

We already have a precedent; Tajuddin took the challenge and makes himself rich enough not to do any business anymore though the same cannot be said of MAS which has been milked to the core and left high and dry.

MAS, being a national asset, needs a high dose of antibiotics to rid it of all the dirt that it has accumulated over all the years and the gomen does not have the funds anymore to continue pumping into the airline. Like it or not and despite criticism from Malay loyalists and nationalists, we need an immediate change in corporate culture and work ethics to allow MAS a decent chance of survival.

There will be plenty of obstacles along the way and the next 2 years will be politically difficult to maneuver with plenty of vested interests and NEP policies to deal with.

Source: http://www.dayaktoday.com/2011/08/21/ai … -the-past/