Yields decline at M'sia Airlines, AirAsia

PASSENGER growth in Malaysia's aviation sector has been strong, but this hasn't carried over into the yields of Malaysia Airlines (MAS) and AirAsia.

Call it the "Malindo Effect". A fare war has escalated with the entry of Malindo Air, a joint venture between Indonesia's Lion Air and Malaysia's National Aerospace and Defense Industries (Nadi), which debuted in March and has grown its fleet to nine aircraft.

The yield numbers for the two older airlines are telling: The regional average yield fell 3 to 4 per cent for the second quarter, but for MAS, the dip was 8.4 per cent, and for AirAsia, 7.8 per cent.