Travellers the winners in price war

01 Feb 2007
Lee Shi-Ian, June Ramli and Norazlin Mohd Nor

KUALA LUMPUR: Slurping on a McDonalds’ ice cream, Ahmad Zaki Abdul Rahman grinned as he guided his family towards a check-in counter.

"This is our first time on an airplane," he said.

The medical attendant, his wife and two young children had paid RM135 in total to fly to Kota Baru for the long weekend.

"The cost of travel for my family is almost the same as driving or taking the bus, only less hassle and stress," he said.

Ahmad and his family are just some of the thousands who will take to the skies this year, thanks to budget airline AirAsia.

With cheap fares and free promotional flights, the no-frills airline has had this segment of the market to itself since Datuk Tony Fernandes took over in 2001.

On Monday, national carrier Malaysia Airlines struck back, unveiling unprecedented discounts of up to 70 per cent for international destinations, and four-night holiday packages to London for RM3,096.

It is charging just RM9 for some one-way tickets to local stops such as Kuantan and Langkawi.

The promotion is part of the MAS Travel Fair which began yesterday, and continues until Feb 6.

"Yes, this is the lowest we have ever gone," MAS commercial director Datuk Abdul Rashid Khan said yesterday.

"We have the freedom to set prices. There was no such thing in the past because our prices were regulated by the government."

AirAsia apparently was not about to let MAS push these promotional fares without a challenge, however, and on the same day, began offering "super low fares".

One-way tickets to Penang, Terengganu and Kota Baru, for example, are available for under RM1, fuel surcharge and other taxes not included.

A seat on a flight to Phuket, Thailand, starts at RM19.99 and to Chang Mai from RM59.99.

Its promotion, tagged "the craziest sale in town", ends the day after MAS plans to end its travel fair.

This brewing price war is "music to the ears of all travellers", said a research analyst at a local stockbroking firm.

"I think more kampung folk, who’ve never been on a plane and seen the world, would benefit from the price war," he said.

AirAsia has taken pains to avoid calling this a price war, and so has MAS.

AirAsia senior corporate communications executive Janet Leow said the two airlines were aiming for different types of travellers.

"Our objective is to go for passengers who want a cheap, fast and easy flight to their destination without the services such as meals and drinks," she said.

"Those who want such services normally fly with MAS."

MAS’ Abdul Rashid said: "To put it in perspective, we face competition from more than 300 airlines, everyday, worldwide.

"This is not a price war."

The national carrier, long criticised for its heavy losses, is confident that it will be able to compete for more travellers as it attempts to return to profit this year.

"We cannot control the competition but we plan to shake it up. We are upbeat that we will be able to sell our domestic fares like hot cakes as we are a five-star airline with full service," he added.

His confidence stems from how the travel fair has performed so far.

"In the first hour, online ticket sales for domestic routes reached RM1 million," he said.

And he is betting MAS’ Australian and European routes will sell like hot cakes.

Source: NST