Sydney Morning Herald: Australia is caught up in a battle between economic liberals and protectionists that is delaying the expansion of air services - and the reduction of airfares - between Australia and Malaysia.
The Malaysian government is siding with the protectionists who argue that the government-owned Malaysia Airlines has to be protected from aggressive new price competition from Air Asia X if it is to avoid the fate of Japan's national carrier, Japan Airlines, which has gone broke and is trading under bankruptcy protection.
AirAsia X's budget beds
AirAsia X has become the first low-cost carrier to introduce flatbed seats to its aircraft.
The government is blocking Air Asia X from starting new services from Kuala Lumpur to Sydney and Seoul - two of Malaysia Airlines' most lucrative routes.
By contrast, Air Asia X is about to increase services between Kuala Lumpur and Melbourne to twice daily, charging regularly available fares of A$600-A$800 return and sales fares as little as A$100 one-way.
Air Asia X, which also flies daily from Kuala Lumpur to Perth and the Gold Coast, was mainly responsible for a 25 per cent increase in travel between Australia and Malaysia last year.
"The complexity is that there's no one single position from the Malaysian Government," the CEO of Air Asia X, Azran Osman-Rani, says. "A lot of stakeholders in the government want to see us fly. The tourism ministry is right behind us because they see how we have stimulated tourism with our flights from Melbourne and Perth in 2009 when most markets shrank. The ministry of transport is equally supportive; they submitted the paper recommending that we be granted rights. A lot of ministers who we've met think it will be a plus for the economy.
"We've made many presentations to the prime minister and the economic council [of Malaysia]. We don't have anything in writing but the informal feedback we've received is not positive and I can only surmise that the conflict is related to Malaysia Airlines, which is owned by the Ministry of Finance and the National Sovereign Wealth Fund.''
Osman-Rani says that two new 377-seat Airbus A330 aircraft arriving in June and July that would have operated the Sydney service now have to be allocated to other routes, including new daily flights the carrier is about to start to Delhi and Mumbai in India.
They will also be used to increase the Melbourne frequency to twice daily on all days of the week, Osman-Rani says.
The carrier has also begun swapping its premium economy seats for lie-flat beds with a pitch of 60 inches, which the carrier will be selling for as little as A$1000 return on the Melbourne-Kuala Lumpur route, Osman-Rani says.
However, the carrier is persisting with nine-abreast economy seats of 31 inches, which are just 16.5 inches wide - half an inch less than the standard 737/767 seat or 1½ inches less than the 18-inch-wide economy seat in the A330 in standard eight-abreast configuration.