We'll pay you to fly....

I was only kidding when I penned this blog entry on 6 May 2008 soon after a price war between Malaysia Airlines and Air Asia finally erupted into the open. At that time, I mentioned that I didn't know how much lower the prices could go beyond zero. But we'll know soon enough, I said.

Well, tonight, I received an email from Air Asia with this incredible message:


Is this becoming a reality? Will Air Asia now give away money for people to fly with the airline? Yes and no.

Yes, they are offering people RM100 to fly with them but no, it's not in cash and there is a pre-condition attached. You have to apply for a credit card which they have tied up with a leading foreign bank. And when the card is approved, you'll get an Air Asia e-Gift Voucher worth RM100. Of course, with this credit card, you need to spend, spend, spend your credit away in order to earn points that can be redeemed against your Air Asia flights, fuel surcharges and others. Smart, eh, their card affiliation programme? I don't know....

What I do know for sure is that there is turbulence ahead for the airline industry. From a high of RM2.14 last year, Air Asia closed yesterdayday at 87.5 sen on the Bursa Malaysia. It has been sliding all the way down past their IPO price for a few weeks now. If that's not a cause for concern for Malaysia's budget airline, I don't know what is.

But Malaysia Airlines has not been spared too. Last year, its price on the Bursa Malaysia touched a high of RM6.15. Where is it today? Tumbled down to RM3.38.