Adam Air: A threat to AirAsia?
Saturday, October 29th, 2005 | 2:50 pm @ SK
[UPDATED VERSION] Last week, I was made to take a closer look at Adam Air, Indonesia’s based boutique carrier (include certain amount of frills such as providing light snacks) which has been given the green flight to fly into Singapore, surpassing AWAIR’s prior application for the same route.
AWAIR, which was incorporated in September 1999 as a privately owned domestic company, dropped its application after Civil Aviation Authority of Singapore (CAAS) delayed giving it the greenlight in March.
Media reported that AWAIR is believed to have failed to provide additional documents in its bid to get approval. However, Singapore’s Transport Minister Yeo Cheow Tong claimed that it’s still unable to give approval to AWAIR due to Indonesia restrictions on foreign low-cost carriers are still in place and that Adam Air operates under different business operating model. Quote:
"If you talk to Adam Air, I think they will tell you quite clearly that they’re very different from a low-cost carrier."
Currently, Adam Air is flying daily to Penang and plans to start Ipoh and Kuala Lumpur services by next year. It’s only a matter of time before Adam Air growing presense poses major challenge to AirAsia, in which the all time low-profile AirAsia’s CEO Tony Fernandes voiced his frustration and shouting for discrimination over the landing issue.
As for budget flyers, when comes to select a low-cost carriers (LCCs), it’s very much on its low pricing which determines the acceptance level. If it’s cheap enough, I can’t see any logic that public is going to deter Adam Air, though some might be skeptical towards its Indonesia origin.
Don’t get me wrong, I love AirAsia, for the fact that it’s one of the most thriving LCCs in South-East Asia, if not in the Asia region. However, one must understand that competition is good, especially for those who get competed with as competition encourages the creation of better services and in a long run, it will be doing more good to the aviation industry, to say the least.
On additional note, LCCs are sprouting fast for now and years to come. If national carrier like Malaysia Airlines (MAS) is not prepared to buck-up, even though one may argue that MAS is targetting a different niche market, however to say that MAS is not going to be affected by the onslaught is a bit insensitive.
We shall see, do-or-die.
Now, Tiger Airways is keen to join in the fray too.