New deal will bring benefits to UK and Malaysian consumers
Greater choice and lower airfares for consumers expected after number of air services restrictions removed in UK and Malaysian agreement.
UK and Malaysia have negotiated a liberalised agreement on air services, Aviation Minister Simon Burns announced today (21 June 2013).
Under the previous arrangements, restrictions were imposed on the number of services that could be operated between the UK and Malaysia. The new fully open agreement removes all restrictions on air services between the 2 countries, leaving airlines free to respond to market demand without government intervention.
Aviation Minister Simon Burns said:
This is excellent news for consumers and the aviation industry alike. I very much hope that it will generate competition among airlines, allowing passengers to reap the benefits of greater choice and lower airfares.
It is one of the most liberal agreements of its type worldwide and I am pleased that the UK continues to set the standard in aviation liberalisation.
This is a further step forward in extending the benefits of fully open aviation markets that passengers already take for granted within Europe - greater choice and lower airfares - and demonstrates that the UK continues to be willing to liberalise market access where it is satisfied that there will be a level competitive playing field.
Simon Featherstone CMG, British High Commissioner to Malaysia said:
I too am delighted by this deal. It is a testament to the strong ties between the UK and Malaysia and will help us deliver on our shared objective of growing investment and doubling bilateral trade to £8 billion by 2016.
The new deal will also relax the restrictions on flights operated to onward destinations, beyond the UK and Malaysia.
The agreement will formally come into effect upon an exchange of diplomatic notes but is being provisionally applied administratively with immediate effect. The removal of the limit on the number of services that can be operated between the 2 countries will apply from 27 October 2013.
Notes to editors
The new agreement removes the limit on the number of services that can be operated between the UK and Malaysia, and also grants the airlines of both sides unlimited rights to:
- pick up and set down passengers and cargo at intermediate or beyond points
- operate services within each other’s countries, and from each others’ countries to other points
It also ensures that there is a level competitive playing field by applying competition and state aid rules.
It is the second such agreement with an ASEAN country, the first being the landmark agreement with Singapore in 2007. The IATA Winter 2013 to 2014 season starts on 27 October 2013.
No UK airline currently operates between the UK and Malaysia. Malaysia Airlines operates London Heathrow-Kuala Lumpur twice a day (i.e. 14 services per week) using A380 aircraft offering 8 First, 66 Business and 420 Economy seats.
Malaysia is a UKTI High Growth Market and UK commercial ties with Malaysia are very strong. UK exports to Malaysia in 2012 were valued at £2 billion. This reflects the wide range of opportunities for UK business and places Malaysia as the UK’s second largest export market in south east Asia, after Singapore. The UK is also one of the largest investors in Malaysia, investing over £20 billion in the past 30 years.
In general, the government seeks to conclude air services agreements that reduce or remove government-imposed restrictions on the numbers of services that may be operated, allowing competition between airlines to the benefit of consumers.
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