The government today said it will adopt a flexible approach related to negotiations in a bid to become a regional aviation hub to compete with Singapore.

Transport minister Dr Ling Liong Sik said Malaysia supported a liberal aviation policy.

" We will not insist on one for one. We will say you take two and give us one," Ling told reporters. "We will adopt a very liberal policy."

Ling was referring to the number of flights a carrier could fly into Malaysia and which in return national carrier Malaysia Airlines could mount its flights.

Asked what other incentives Malaysia would offer to beat off competition from its southern neighbour Singapore, he said: "We are open to a lot of suggestions."

Ling cited Malaysia's open skies agreement with a few countries it had signed as one of the means to attract carriers to the Kuala Lumpur International Airport (KLIA).

Open skies agreements permit unrestricted air services by airlines. Malaysia has inked such agreements with the US, New Zealand, Austria and Taiwan.

Reciprocal agreement

Ling said Malaysia was willing to come to such an agreement with any country but it must be based on reciprocity.

Malaysia Airports Holdings Bhd, which manages and operates 37 airports in the country, said Wednesday it would spend RM10 million to promote KLIA a regional hub for 2002, he said.

The KLIA opened in June 1998. But five carriers including British Airways, Qantas and Lufthansa have stopped flying to the futuristic KLIA, dealing a blow to make it a regional aviation hub.

Though it was built to handle as many 25 million passengers a year, only 14.6 million people passed through KLIA last year.

Ling said a hubbing committee - comprising aviation officials, Malaysia Airports and Malaysia Airlines - was preparing a package to woo more carriers to KLIA.

"We are studying what other airports are doing. We are putting together a package. It has not be finalised. We will do what is within our capability," he said.

Present waivers

Currently, KLIA offers a waiver of the first year's parking and landing charges that will expire in April. This will be followed by a 50 percent discount for the second year and 25 percent discount for the third year.

On KLIA's ability to compete with Singapore's airport, Ling said KLIA currently offers the lowest aviation charges and he expects passenger loads to improve.

An aviation official told AFP other incentives Malaysia could consider to make its vision a reality of turning KLIA into a hub included eliminating restrictions on how often carriers can fly into KLIA and the kind of aircraft they use.

The official said Malaysia must also study why key carriers like Qantas pulled out of Malaysia.

"When the yield is good, market is good, they will come," he said on condition of anonymity.

On Wednesday another aviation official said it would be an uphill task for KLIA to be a regional hub due to its close geographical proximity with Singapore.

"How can we become a hub when Singapore Airlines undercut ticket prices in Malaysia. A lot of Malaysians are flying international destinations via Singapore," the official told AFP on condition of anonymity.