>SINGAPORE Airlines and Malaysia Airlines have ended more than 30 years of fixing fares and splitting revenues on the Singapore-Kuala Lumpur route, The Straits Time reported.
The strategic move - less than two weeks before budget airlines muscle in on the lucrative route - is to allow the incumbents to be more nimble so they can compete effectively with the new kids on the block, industry observers said.
The split though will not spell the end of the SIA-MAS partnership, they said in separate statements yesterday.
With effect from Monday, they will enter into a new codeshare agreement which means that a passenger holding an SIA ticket can also fly with MAS, and vice-versa.
Tickets under the new deal go on sale from Friday.
Travellers will still be able to buy on-the-spot Singapore-KL shuttle tickets from the airport.
A two-way SIA shuttle costs about $336 - about the same fare that MAS charges out of KL.
The Straits Times understands that the shuttle agreement which was inked between the two national carriers - with the blessings of both governments - has to stay for now.
The reason is that it allows for more Singapore-KL flights than the Singapore-Malaysia air service agreement provides for.
To do away with the shuttle deal without expanding the bilateral air agreement would effectively reduce the number of flights between the two cities.
Between them, SIA and MAS operate a total of 13 daily flights in each direction - offering more than 21,000 round-trip seats a week.
The only other airline sharing the space is Japan Airlines, which flies once a day between Singapore and Osaka via Kuala Lumpur.
Consumers who have long complained of high fares on the sector - $440 for a round-trip flight - can expect the price to come down down with the changes.
From December, all restrictions will be lifted to allow low-cost carriers to fly as many times as they wish between the two points.
The liberalisation of one of Asia's most protected air routes is expected to benefit airlines now serving the market as well as the new players.
Right now, there are just 222 to-and-fro flights on the sector, compared to 303 flights for the Singapore-Bangkok route and 389 for Singapore-Jakarta.