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Question For Oral Answer

21 Nov 2005 In Parliament

Prof Ivan Png Paak Liang: To ask the Minister for Transport if he will work with the Malaysian Government to generally liberalize air services between Malaysia and Singapore, and specifically to (a) abolish the revenue pool on the Kuala Lumpur to Singapore air route, as it inhibits market competition; and (b) facilitate multi-mode travel, for instance, arrangements combining travel by bus and air.


1.     Singapore has always adopted an open aviation policy that seeks to maximise air links with other countries for mutual benefit. We have always been prepared to liberalize our Air Services Agreement with Malaysia to establish more air links between our two countries.

2.     During PM's visit to Malaysia in October 2004, PM and Malaysian PM Abdullah Badawi had agreed to expand co-operation in air transport. Minister Yeo Cheow Tong had also visited his Malaysian counterpart, Transport Minister Dato Chan Kong Choy last year  [1], and they agreed that it would be timely for both sides to review our bilateral Air Services Agreement, which was last expanded in 1980. Since then, our officials have held preliminary discussions to expand the air links. We have also invited Minister Chan to visit Singapore for further discussions.

3.     A more liberal Air Services Agreement would allow carriers from both sides to expand their operations between Singapore and both Peninsula and East Malaysia. It would also pave the way for new Singapore and Malaysian carriers to serve the market. The travelling public will benefit from a wider choice of carriers and destinations, as well as more competitive fares. More air links will generate greater economic benefits for both countries as well as the region through increased tourism, trade and investments. Singapore and Malaysia can also help bring about a more liberal aviation regime in ASEAN by taking the lead and moving ahead of ASEANs goal of lifting all restrictions on passenger flights between the ASEAN capital cities by 2008 [2].

4.     Prof Ivan Png has asked if the existing revenue pool arrangement between SIA and Malaysian Airlines on the Singapore-Kuala Lumpur route would be abolished as this may be inhibiting market competition. Let me provide some background information on this revenue pool arrangement. SIA and Malaysian Airlines first entered into this arrangement in September 1988 to divide their combined revenues from their Singapore-KL operations. The objective was for both airlines to share capacity and co-ordinate flight timings in order to provide frequent and regular operations for the Singapore-KL route. Today, the two airlines operate a combined total of 13 frequencies per day, i.e. almost an hourly service by SIA or Malaysian Airlines between 6 in the morning and 11 at night. As this revenue pooling arrangement is a commercial agreement between SIA and Malaysian Airlines, it best for the two airlines to decide on whether to continue with this arrangement, based on their commercial considerations.

5.     This arrangement however does not prevent other approved carriers from operating services between Singapore and Malaysia. Besides SIA and Malaysian Airlines, other carriers such as Japan Airlines currently operate a total of two daily services between Singapore and KL. Singapore is prepared to allow other carriers from both countries to operate on the Singapore-KL route, as well as to other points in Malaysia but this will require the agreement of the Malaysian side. I therefore hope that both sides can meet soon to expand bilateral air services for the benefit of the travelling public.

6.     Prof Ivan Png has also asked about facilitating multi-mode travel. We would be happy to explore this where it makes sense and in our national interests. In any case, there are already extensive road transport services linking Singapore and Peninsular Malaysia.


Issued by: Ministry of Transport
Date: 21 Nov 2005

[1]Minister(Transport) visited KL on 17-18 June 2004.

[2]This is one of the key milestones under the ASEAN Roadmap for Integration of Air Travel Sector(RIATS), which sets a schedule for the liberalisation of passenger and cargo services in ASEAN.RIATS was adopted by ASEAN Transport Ministers during the 11th ASEAN Transport Ministers Meeting on 23-24 Nov 04. RIATS and 10 other ASEAN roadmaps on other sectors were later ormalised by way of Protocols signed by ASEAN Economic Ministers at the 10th ASEAN Summit on 29-30 Nov 04.