MAS responds to competitor’s accusations

KUALA LUMPUR – The recent launch of Malaysia Airlines' (MAS) Everyday Low Fares (ELF) has more than ruffled a few feathers in the airline industry, with accusations by competitor AirAsia that the national carrier is indulging in unfair competition and predatory pricing. But according to Dato' Sri Idris Jala, MAS managing director/CEO, nothing could be further from the truth.

Idris said that ELF was introduced to help MAS manage its inventory of seats more efficiently and to minimise and recover costs, which are rapidly escalating. “We have an average seat-factor of 70 percent, which means that our planes are taking off with 30 percent of the seats unsold. With sky-rocketing fuel prices today, this means that every unsold seat adds on to our overall costs. What we are doing is simply to recover part of these sunk costs through the fuel surcharges," he said.

Idris noted that AirAsia has also been giving away free seats for years without any protest by MAS and that AirAsia’s CEO, Tony Fernandes, had claimed that his sales have increased by 20 percent when MAS launched its Everyday Low Fares and is still unhappy about it.

Idris also categorically denied the accusation by Fernandes that MAS was using international subsidies to fund ELF.