Malaysia and Australia are in talks to open low-cost route between the two countries, the airlines to be Jetstar and Air Asia.
Air Asia's plans to expand its network to include long-haul destinations looks like going ahead, the price for landing rights in Australia being a reciprocal agreement for Qantas-owned Jetstar to operate from Kuala Lumpur. Air Asia wants to fly to Melbourne's Avalon airport, a low-cost hub for Jetstar.
Negotiations are now in taking place and it is expected that by the second-half of the year Jetstar will be operating between the two countries. If so, Jetstar will be the first major foreign airline to fly from Kuala Lumpur's busy low-cost terminal. This is used almost exclusively by Air Asia, the regions's largest low-cost airline.
The terminal is rapidly approaching its capacity of 10 million passengers, and it is expected to handle about 6.5 million passengers this year. Earlier this month Air Asia's founder said he wanted to double the airline's Airbus A320 fleet to 200 to expand the service. He also launched AirAsiaX (see former blog) which from next July will fly to cities in China, India and Europe.
AirAsiaX was founded just five years ago by Tony Fernandes, whose ambition is to develop an aviation hub to rival those of Singapore and Bangkok. If he can break into the lucrative Kuala Lumpur-Singapore route, currently dominated by Malaysian Airlines and Singapore Airlines, he will be a very happy man.
The Association of Southeast Asian Nations has plans to open up routes between its capital cities in 2008, but there are moves by Malaysia to accelerate this. Tiger Airways, one of Singapore's low-cost carriers and whose major share-holder is Singapore Airlines with a 49% stake, has shown a strong desire to operate into snd out of Malaysia.
The Malaysian government seems to be very determined to make Kuala Lumpur an aviation hub in this part of the world, and by promoting low cost carriers this will surely happen quite soon.