KUALA LUMPUR - MALAYSIA said on Wednesday that low-cost Australian airline Jetstar is eligible to fly the newly liberalised Singapore-Kuala Lumpur route, after reports said it would be barred.

Newspaper reports had quoted Transport Minister Chan Kong Choy as saying that Malaysia's aviation agreement with Australia would prevent it from operating the lucrative route, which is being opened up after a long monopoly.

However, a ministry official said that the airline to operate the route would be Singapore-controlled Jetstar Asia, which is a separate entity from Jetstar Australia, which is backed by Qantas.

'Even if the Singapore government did not nominate it, Jetstar Australia also has the right to fly the route under the existing Malaysia-Australia air services agreement,' he told the Bernama state news agency.

Australia's Jetstar could operate the route under the 'fifth freedom' clause which permits an airline to carry passengers from its own country to a second country, and from there to a third country, he said.

Last month, Jetstar Asia received approval from Singapore's government to fly the route from February 1.

Subsequently, Jetstar advertised promotional fares from 1.88 ringgit (S$0.57) plus taxes and surcharges, but stated that the flights were still subject to regulatory approval.

Singapore has also granted Tiger Airways rights to operate the route from February, while from its side Malaysia proposed Kuala Lumpur-based AirAsia - the region's largest budget carrier.

Malaysia Airlines and Singapore Airlines have enjoyed a profitable lucrative 35-year stranglehold on the short KL-Singapore hop. -- AFP