AirAsia is now putting pressure on Malaysia Airlines as well as the government to hand over as many domestic routes as possible to it, not only to save taxpayers money in the form of subsidies to MAS but also to allow MAS to concentrate on the more profitable international operations.

MAS and the government, however, should be careful, very careful, in giving thought to this. Starting with domestic routes, AirAsia will then demand some routes to India and China and eventually, in the spirit of 'open' competition it would demand an 'open skies' treatment.

Anyway, If MAS can't make money on domestic routes, how is it AirAsia says it can? It must have a few tricks up its sleeve.

At the moment, travellers - both business and budget - have a choice of two airlines for their domestic travel.

This 'duo-poly' situation serves us passengers well. Go for Air Asia if you want cheaper fares and are able to plan well ahead but choose MAS for business trips, emergency situations or if you want to enjoy full airline service.

But what would happen when AirAsia has monopoly of the domestic routes? You don't need to be a Nobel Prize winner for economics to know that monopoly usually means complacency, poor service, higher fares and bad customer service.

If the government is determined to hand over domestic routes to AirAsia, it must also call for more 'no frills' airlines to operate on these domestic routes to encourage healthy competition.

Nowadays, it is not that difficult to run this business. Given the financial backing, many Malaysians can operate a 'no-frills' airline. It's just the matter of applying for the license and landing rights, leasing a few planes (which are plentiful in the market), hiring a few pilots (also plentiful) and cabin crew (maybe ex-MAS staff).

Ground handling, engine servicing, etc are, like AirAsia, contracted out. Just make sure safety is never compromised.

I would like to see two or three 'no frills' airlines servicing our domestic travel. In the US, you pay cash or with a credit card for travel between New York and Washington. We could do the same here for flights between the state capitals.