Low-cost carrier AirAsia will operate more frequent flights and routes to local destinations currently dominated by loss making national carrier Malaysia Airlines, the government said today.

Under the rationalisation programme backed by the government, AirAsia would operate all the domestic non-trunk services.

"The government is in the view that the rationalisation process of the domestic flights sector was needed to ensure the long-term success of Malaysia Airlines and AirAsia," the prime minister's department said in a statement.

AirAsia would operate the domestic trunk services along with Malaysia Airlines. Trunk routes are routes with high flight frequencies. There are currently five to 10 such routes in the country.

The government said Malaysia Airlines and AirAsia will be given the flexibility to determine the flight frequencies, capacity distribution, type of aircraft and fares subject to the supervision of the Transport Ministry.

Unprofitable rural air services

AirAsia Chief Financial Officer Raja Mohamad Azmi told AFP that under the rationalisation plan AirAsia would get more flights.

"Yes, we are happy because the government has finally come out with a rationalisation plan," he said.

Talks have been going on for more than a year.

AirAsia officials said under the plan, AirAsia would take over the unprofitable rural air services in Sabah and Sarawak on Borneo island.

The government has also ordered both AirAsia and Malaysia Airlines to work together to identify what are the trunk services and non-trunk services and frequency details.

Details of the negotiations will be presented to authorities by March 27.

"The government will ensure that the domestic flight services remained competitive and fulfilled the needs of all customers," the statement said.