MASwings (MY, Kota Kinabalu) will likely be Malaysia's last budget carrier to ply the local market after the country's Ministry of Transport placed a moratorium on the issuance of Air Operator's Certificates (AOC) to new budget carriers (LCC).
Abu Hassan, a senior officer in the ministry, told AIN Online that the Malaysian domestic and regional markets had become saturated and could therefore not support another LCC entrant.
“There is fierce competition among the airlines at the moment to the extent of a fare war, and Malaysia Airlines (MH, Kuala Lumpur International) has to drop fares to stay afloat in the market,” he said denying the move was aimed at protecting ailing national airline, Malaysia Airlines.
Once MASwings' restructuring into a budget carrier is completed later this year, it will come up against the likes of AirAsia (AK, Kuala Lumpur International) and Lion Air subsidiary, Malindo Air (Kuala Lumpur International). Last week, start-up Kestrel Airlines (Ipoh) announced plans to begin leisure flights to China by year-end though it is currently uncertain as to what aspect of the market it will target.
