Kuala Lumpur-Singapore air route: HSR no longer a threat

One of the first decisions of Malaysia's new government was to scrap, or at least postpone, a high speed rail (HSR) project with Singapore. This will benefit the five airline groups serving the world's third largest international air route.

The route is currently served by multiple brands under the Malaysia Airlines Group and Singapore Airlines Group, as well as AirAsia, Jetstar Asia and Lion Group's Malindo Air.

The HSR link, which had been slated to open in the middle of next decade, would likely have led to at least a 50% drop in Kuala Lumpur-Singapore air traffic. This is the equivalent of approximately 4% of total traffic at both Kuala Lumpur International Airport (KLIA) and Singapore Changi - more than 2 million annual passengers.

The reduction in aircraft movements would have been even higher because more than 90% of Kuala Lumpur-Singapore flights are operated by narrowbody aircraft. With an HSR line competing for passengers in their largest market no longer on the cards, Changi and KLIA can expect higher growth rates, which will help support their major infrastructure investments. For Singapore the decision to invest in a third runway and fifth terminal is now looking even smarter.