Air versus Land

So just when you think it is safe to go to the bank.....

Now competition in the sky has hit the ground. The Straits times has this to report.

While budget airlines slug it out for a piece of the lucrative Singapore-Kuala Lumpur route, bus operators are feeling the heat too.

At least one is resorting to slashing its fares, while others say they will focus on improving service standards.

The competitive prices that are being dangled by budget carriers plying the route have resulted in business falling between 5 per cent and 30 per cent during the first quarter this year for major bus operators here.

Airfares can sometimes be priced even lower than coach fares. For the first week of this month, Air-Asia offers some all-in, one-way fares at just S$28 (RM98.74), while coach fares range from S$30 to S$65.



Four days ago, another budget carrier, Firefly, started operating the same route, with promotional fares going for S$36.

Transtar, a big player which operates mostly luxury bus services to and from KL, has seen budget airlines impact its business by about 25 per cent.

It plans to slash its fares — now between S$35 and S$65 — by 10 per cent starting from September.


Its executive director, Sebastian Yap, said: “Business is going to go from bad to worse. If airlines continue to offer low fares, then it will have a serious impact on our business.”

Law Cheok Gheen, chief executive officer of another luxury bus operator, Aeroline, said it suffered a “double-triple whammy effect” in the first quarter of this year, when passengers for its services fell 30 per cent.

A one-way trip from Singapore to KL on Aeroline costs S$43 to S$49.

“But today, buses are running in healthy numbers again, albeit with a reasonable dent of 15 per cent,” he said.

He attributes this drop to the airlines’ aggressive marketing and competitive pricing, but believes the improved numbers suggest that travellers still prefer buses.

Still, most bus operators interviewed are not overly worried and do not intend to get into a price war with the airlines.

Michael Chan, executive director of Firstcoach, said budget carriers are able to charge fares comparable to bus fares now because it is the off-peak travel season.

“Come peak season, the difference in prices will be much greater than it is now,” he said.

Bus operators gave other reasons for travelling by land: the fluctuation of airfares is something that bus passengers do not have to grapple with.

Bus passengers also enjoy a hassle-free city-to-city journey without needing to leave their seats except at immigration checkpoints.

The real impact has yet to come.

Said a spokesman for Grassland Express & Tours: “I foresee the real negative impact on buses during Chinese New Year next year, as the early bird discounts which airlines give will entice many to book early. That’s when it will really hit us.”

Whoa! Believe me! As the economy continues to be morose,expect the effects to be chilly as budget airlines trumped coaches on both sides of the Causeway!