No subsidy in MAS fares

  • Nation
  • Saturday, 17 May 2008

PUTRAJAYA: No form of subsidy was involved in Malaysia Airlines' Everyday Low Fare promotion, said Transport Minister Datuk Ong Tee Keat.

He said claims by AirAsia group chief executive officer Datuk Tony Fernandes that MAS was using subsidies for international flights for its domestic low-fare promotion were not true.

“Any effort to lower fares or have low-fare promotions are commercial decisions by the two airlines. It has nothing to do with the Federal Government,” he told reporters after witnessing the signing of the contract between the Government and Ircon International Ltd for the construction of the Seremban-Gemas electrified double-tracking project yesterday.

“Allegations that there were RM400mil in subsidies involved (in MAS’ low-fare promotions) do not arise.”

Ong said the Government would not intervene in the price war.

“We do not want to intervene in healthy competition which benefits the people,” he said.

On the RM3.45bil Seremban-Gemas electrified double-tracking project, Ong said it was scheduled for completion in four years.

Ircon, which has been engaged in the development of railway projects in Malaysia since 1988, has been involved in 12 major railway projects, including track rehabilitation and construction of new lines.

In Kuala Lumpur, AirAsia deputy group chief executive officer Datuk Kamarudin Meranun said a level playing field was needed to ensure fair competition.

He also said AirAsia’s branding in the English Premier League was jointly sponsored by the airline and Tourism Malaysia, and was not subsidised as claimed by MAS managing director and chief executive officer Datuk Seri Idris Jala.

“We have many restraints ... Why is MAS focusing on AirAsia routes? Why are they targeting our model?” he asked.

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