( dpa )- An agreement between the national carriers of Singapore and Malaysia fixing fares, coordinating flight schedules and splitting revenue on the Singapore-Kuala Lumpur route appears to be coming to an end, a newspaper reported Thursday.
With budget carriers entering the market on February 1, The Straits Times said Singapore Airline (SIA) and Malaysia Airlines (MAS) are reviewing the pact signed nearly three decades ago.
SIA and MAS will likely decide to fly solo on the lucrative route, aviation analysts said.
"More competitive markets are emerging throughout Asia," SIA spokesman Stephen Forshaw was quoted as saying. "It means we have to be dynamic and highly responsive to the (Singapore-Kuala Lumpur) market."
"The opening of the market means we will evaluate the agreements which have their legacy in another time," Forshaw said.
"We will have some discussions with Malaysia Airlines in due course, but each airline will make its own decisions on the course of options they wish to take," he said.
Currently both airlines bear their own costs. Revenue is equally split.
SIA and MAS dominate the market with 92 services a week, 50 by MAS and 42 by SIA.
Starting next month, Singapore-based Tiger Airways and Jetstar Asia will each operate one flight a day. Malaysia's AirAsia will operate two for a total a four services daily.
All restrictions will be lifted in December, allowing the airlines to fly as many times as they want.