Rayani Air To Join The Fray Of Malaysia’s Low-Cost Carriers

Malaysia will see the entry of another low-cost passenger airline with Rayani Air Sdn Bhd due to receive its air service license and air operator’s certificate from the Department of Aviation today.

The new entrant will compete head-on with established budget carriers in the likes of AirAsia Bhd and Malindo Air. For a start, Rayani Air will offer flights from klia2, Langkawi International Airport, and Kota Bahru’s Sultan Ismail Petra Airport.

Rayani Air has picked Langkawi as its aviation hub in its effort to attract more tourists to the resort island.

During its launch the Langkawi International Airport last November, the low-cost airline’s managing director Ravi Alagendrran revealed that a Boeing 737-400 would commence its Langkawi-Kota Bahru flight operation while another would begin the Langkawi-Kuala Lumpur destination.

“The company has allocated two planes for overseas flight operations next year,” noted Alagendrran.

According to various media reports, Rayani Air is the fourth airline in the world that imposes Sharia-compliant dressing code on each of its Muslim cabin crew after Royal Brunei Airlines (RBA), Saudi Arabian Airlines and Iran Air.

In addition, no alcoholic beverages or pork are served on board in accordance with Islamic dietary laws with prayers to be recited before every flight departure.

Rayani Air was previously based at the Malacca International Airport with its inaugural flight slated to take place in August this year. However, it subsequently shifted its base to the Langkawi International Airport in order to attract tourists to the resort island.

Affin Hwang Capital Research is neutral on the development. “While the new entry will create more competition and options for the customers, it may in the medium term potentially create further price competition within the market, hence capping yields amongst airlines,” the research house pointed out.

All-in, Affin Hwang Capital Research maintained its BUY rating on AirAsia with a fair value of RM1.85. “The logistic sector remains a NEUTRAL,” added the research house.


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