Malaysia Airlines announced Thursday it would slash some domestic airfares by half from Aug 22 and was considering introducing "no-frills" flights to turn around its domestic operations.

Senior sales general manager Ahmad Fuaad Dahlan said the fare cut was part of an ongoing supersaver program and an average 14,000 economy-class seats would be allocated for the cut-rate fares each week to capitalise on excess capacity.

Ahmad said the move would not put a further dent into the airline's loss-making domestic operations, which posted losses of around RM300 million last year.

"This is just to generate the additional numbers (passengers)... if the normal price customers are already filling up the aircraft, this would not be applicable because it is subject to availability," he was quoted as saying by Bernama news agency.

The carrier's domestic passenger load rate is above 70 percent and its most lucrative route is from peninsula Malaysia to eastern Sabah and Sarawak states, he added.

Industry observers said the move appeared to be designed to counter cheap domestic fares offered by no-frills local airline Air Asia, which has announced ambitious plans to expand into the region next year.

Ahmad said the fare cut was a platform for experimental plans to introduce no-frills flights such as those offered by Air Asia within Malaysia.

No competitions

A Malaysian Airlines official told AFP that the flag carrier was not threatened by Air Asia or competing with its smaller rival.

"The move is purely to generate extra revenue on the excess capacity that we have and to encourage more Malaysians to fly," he said.

"We cannot be compared to Air Asia because we are still offering the same inflight comfort to passengers with discounted fares. We are not compromising on our standards."

The move came two days after the troubled flag carrier unveiled a plan to accelerate its return to the black by 2003, a year earlier than anticipated, after five consecutive years of losses.

The proposal includes splitting its domestic and international operations, and scrapping plans to delist from the stock exchange. AFP