Budget carriers have won a long battle to operate the lucrative Singapore-Kuala Lumpur route, breaking a monopoly held by the two countries' national carriers.

Major dailies said the Malaysian cabinet had given the green light for Malaysia-based AirAsia and Singapore's Tiger Airways to fly the route, setting the stage for a price war.

The New Straits Times said that from December or January, AirAsia can operate two daily flights each from Kuala Lumpur and Penang, and from Kota Kinabalu and Kuching on Borneo Island.

AirAsia officials said they were not immediately able to comment on the reports.

The pioneering low-cost carrier had mounted an intense campaign to break the monopoly held by Singapore Airlines and Malaysia Airlines.

40-minute trip

Departing from Singapore, a round-trip ticket on the route, which takes less than an hour, currently costs around RM1,400 including taxes. AirAsia is proposing one-way tickets from RM290.

AirAsia's founder Tony Fernandes said this week that with Singapore indicating it wants to open the sector to competition ahead of a January 2009 deadline, Malaysia Airlines remained the only roadblock.

The Malaysia carrier has opposed an early opening of the money-spinning KL-Singapore leg, saying it needs more time to carry out a turnaround plan aimed at restoring profitability.