Malaysian Air, SIA say end Singapore-KL shuttle deal

KUALA LUMPUR, May 16 (Reuters) - Malaysian Airline System (MASM.KL: Quote, Profile, Research, Stock Buzz) and Singapore Airlines (SIAL.SI: Quote, Profile, Research, Stock Buzz) will scrap from June a deal that allows passengers to go on walk-in flights under a shared shuttle service, the flag carriers said on Friday.

But the termination of the 25-year old shuttle agreement, on a route that is the one of the most profitable for Malaysian Airlines, will not cut frequencies or the variety of fares available on the route, they said in a statement.

Under the deal, the two carriers charge passengers who turned up at the airport on standby for the next flights for a common fare.

"The progressive deregulation of the Singapore-Kuala Lumpur route and the ever-increasing use of the Internet for a variety of transactions such as booking of tickets and check-in (even at the last minute), has changed the travel landscape, removing the need for a shuttle service," the statement added.

The route is also being taken up by budget carriers such as Air Asia (AIRA.KL: Quote, Profile, Research, Stock Buzz), despite strong objections by flag carriers. (Reporting by Soo Ai Peng; Editing by Ramthan Hussain)