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MAS uses Firefly to fight AirAsia

Friday November 12, 2010
Friday Reflections – By B.K. Sidhu

MALAYSIA Airlines (MAS) has admitted that it is tough fighting a low-cost carrier (LCC).

It has decided to use its wholly owned unit, Firefly, to take on AirAsia. Firefly will turn into a true blue LCC and use jets in the attack.

On Monday, Firefly said it would fly commercial jets for domestic routes and begin with crossover routes, e.g. Kota Kinabalu and Kuching, on Jan 15. Asean will be its next stop.

Its B737-800s will take off from KL International Airport (KLIA). Firefly wants to have a fleet of 30 aircraft in five years and that means forking out a lot of money to keep up with competition.

Perhaps parent MAS has a plan to help with the purchases. Firefly will still maintain its turboprop operations at Subang.

Firefly wants to work on a model like that of Southwest and Ryanair – the global airlines that have made it big in low-cost travel. This is also the same model that AirAsia used nine years ago and today AirAsia is a household name in many Asean countries.

Firefly is aiming to have the lowest unit cost, lower than AirAsia's 11.2 sen. And expect Firefly to follow AirAsia's example in "throwaway" fares and free seats to fill up its airplanes.

Firefly fired its first salvo this week by offering tickets for as low as RM9 for travel between Jan 15 and May 31 next year from KL to Kota Kinabalu and Kuching. Understandably, this has created some buzz about Firefly's entry to the LCC world.

The latest development means more competition and hopefully this translates to more lower fares, better quality of services and wider choices.

Flashback a decade ago when we had to pay premium prices to travel. Today, for RM1 it is possible to reach somewhere by air. Had there been no competition we would still be paying premium prices. So there is really enough room for more competition.

For Firefly, the takeoffs from KLIA mark a new beginning and the only way to go is up. For MAS, it does not need to bend backwards to fight the low fares offered by AirAsia.

For AirAsia, the heat is on even though its flamboyant boss Datuk Seri Tony Fernandes seems unperturbed. To him, competition is not new and he is not going to sweat over legacy carriers.

The tourism sector will get a boost with wider access and Malaysia Airports Holdings Bhd will have a new airline operating from KLIA.

While there are so many positives, the skeptics have their own views. To them, "MAS had no choice but to opt for a hybrid model to compete with AirAsia for short haul routes."

They also do not think Firefly will be able to expand as aggressively as AirAsia as Firefly needs to coordinate everything with MAS. There is also the possibility of MAS' network shrinking if Firefly takes some of its routes and in some areas Firefly will have to compete head-on with MAS.

While Firefly thinks it can bring costs down, the skeptics say it is not going to be easy.

Competition is good as it gives people the right to choose the best. Hopefully we will see fewer flight delays and cancellations, better quality services, aerobridges used at the new LCCT, fares continue dropping and more new destinations springing up.

But one thing the LCCs should seriously consider is offering up to 20kg free check-in luggage. Some LCCs in the world are doing it, so why not the Malaysian LCCs?

Of course, if they can add inflight entertainment for the short haul routes, that would be a bonus.

I believe in this age and time, even travellers – even if they are paying cheap fares – should not be deprived of entertainment on board.

This article is a verbatim copy of the original article from The Star.

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