No ceiling price for airfares, says transport minister

Transport minister Anthony Loke says the idea, which was put forward by MPs from East Malaysia was rejected following an extensive study carried out by Mavcom.

KUALA LUMPUR: The suggestion to introduce a ceiling price for airfares during festive periods has been rejected, Transport Minister Anthony Loke said today.

Loke said the idea, which was put forward by MPs from East Malaysia, was rejected following an extensive study carried out by the Malaysian Aviation Commission (Mavcom).

“From Mavcom’s study, if the proposal for a ceiling price for airfares during the festive period is carried out, it will have an impact on the average price during non-peak seasons, as airlines will increase the prices of tickets on normal days.

“It is all based on demand and supply. If the demand is high, of course the price will be high as well. It will impact the fares on normal days. We don’t want to see this happening.

“We have been seeing a trend where domestic airfares have gone down in the last few years, and we don’t want to reverse this trend,” he said, adding that other countries also did not impose ceiling prices, and the ones that did, like Indonesia, had failed to reduce the prices.

Loke was speaking at a press conference after a meeting with Mavcom and the chief executive officers of Malaysia Airlines, Malindo Air, and Air Asia here today.

Loke said the meeting discussed how to reduce prices and that the consensus reached was for all three airlines to offer more flights during three main festive periods next year – Chinese New Year, Hari Raya and the Gawai and Kaamatan festival.

He said the technical paper by Mavcom showed that 10 routes saw an airfare hike of three times or more during the festive periods.

“The prices during these three periods are sensitive, due to high demand, so the prices go up. For next year, we will start with Chinese New Year, Hari Raya and the Gawai and Kaamatan festivals, to see how we can reduce the price.

“For next year, all three airlines will be offering at least 20% more flights, which will begin seven days before the festive period, where there will be an increase in supply on a daily basis. More seats will be sold,” he said, adding it would be put on a one-year trial basis.

He also said that the increase of at least 20% in flights would depend on the availability of aircraft.

For Chinese New Year, the Seremban MP said seven routes had already been identified for an increase in flights, namely KL-Sibu, KL-Kota Kinabalu, KL-Kuching, Ipoh-Johor Bahru, Johor Bahru-Sibu, Johor Bahru-Kuching and Johor Bahru-Kota Kinabalu.

Loke said they were in the midst of identifying routes that needed to have an increase in flights for Hari Raya Aidilfitri as well as the Gawai and Kaamatan festivals.

Sales of tickets for Chinese New Year will begin on October 1, while sales for Hari Raya will start in Feb or March next year – at least two to three months ahead of time.

Loke advised passengers to book their flight tickets early, as the fares could be higher if they book it at the last minute.

On why only the three festive periods had been chosen, Loke said these were the most demanding periods.

“What is important is we do not want a situation of over-capacity and waste of resources. We are starting with these three because they are the most demanding.

“If we still cannot reduce the price then we have to figure out other ways. We need to be proactive and find a fair approach for both consumers and airlines,” he added.