The only credible challenge to the two carriers is Malindo Air, which launched flights in 2013.
A report in the Nikkei Asian Review (NAR) said when Malaysia Airlines was reeling from two tragedies and debt problems, and AirAsia was facing problems after a plane crash, some investor groups had eyed an opportunity to start airline companies.
It said Rayani Air launched domestic flights last December as Malaysia’s first carrier compliant with Islam’s Shariah rules.
However, the authorities revoked its licence in June on finding that it lacked adequate financial or management capacity.
Flymojo, which had ordered aircraft and planned to launch its service in October 2015, has yet to get airborne.
Monspace Sky Airlines flew one flight on July 22 but promptly was rebuffed by regulators who said it lacked approval to operate, according to the NAR report.
In contrast, Malaysia Airlines is bouncing back and AirAsia is flying high.
Malaysia Airlines expects to return to profit by 2018 with the help of cost cuts and operational improvements, while AirAsia reported on Aug 29 that its net profit for the April-June quarter rose 41 per cent from a year before to RM342 million with a boost from higher passenger traffic.
Malindo is on track to carry 6 million passengers this year, up from about 900,000 in 2013. And it is expanding its fleet this year by 10 planes to 37.
“Malindo has been very aggressive lately,” Shukor Yusof, founder of aviation research company Endau Analytics in Singapore was quoted as saying by NAR.
“They have been pulling passengers away from AirAsia and Malaysia Airlines with some staggeringly low fares.”
Given this situation, Maybank Investment Bank aviation analyst Mohsin Aziz feels there is no room for another player.
The market, he told NAR, was too crowded. “Anyone who wants to start an airline now is either stupid or crazy.”
Brendan Sobie, CAPA’s Singapore-based chief analyst, told NAR: “There is room for a restructured/reinvigorated Malaysia Airlines, Malindo and AirAsia/AirAsia X.
They all need to focus on executing their current business plans and strategy and don’t necessarily need to be overly concerned about what the other is doing.”