Singapore Airlines' chief executive Chew Choon Seng on Thursday said he was not afraid of boosted competition on the lucrative Singapore-Kuala Lumpur route following the end of a long-held monopoly.

But hours after Malaysia announced that budget carrier AirAsia would begin plying the route held by Singapore Airlines (SIA) and Malaysian Airlines, he insisted on equal access to the Malaysian market.

Chew, who arrived in Sydney on the maiden commercial flight of the Airbus A380, said that while he welcomed the competition, Kuala Lumpur should grant reciprocal rights to Tiger Airways, a budget carrier majority owned by SIA.

"We have nothing against opening up competition," he told AFP at Sydney airport. "We only ask for equal rights to have access to Malaysia."

The company's head office also issued a statement saying it was ready to face competition on the once protected route.

"Singapore Airlines welcomes liberalisation and we stand ready to compete against others in the markets that we serve," the carrier said.

Malaysian Prime Minister Abdullah Ahmad Badawi said earlier Thursday that AirAsia had won a battle to fly the Singapore-Kuala Lumpur route, breaking the 35-year-old stranglehold on the route by SIA and rival Malaysia Airlines.

"We have made a decision, the cabinet has approved," Abdullah told reporters in Kuala Lumpur when asked if AirAsia had been given the green light to fly the short route.

Newspaper reports said that the Malaysian cabinet had already given approval Wednesday for AirAsia and Singapore's Tiger Airways to operate the leg, setting the stage for a price war.

Tiger Airways said in a statement issued from Singapore that it had approached Singaporean authorities to grant the budget carrier the right to operate the route.

"Liberalising air rights on this major commercial route to allow low fare carriers like Tiger Airways to operate on it would benefit commercial and recreational travelers as well as the economies of the two countries," a company spokesperson said.

Departing from Singapore, a round-trip ticket on the route, which takes less than an hour, currently costs around 450 Singapore dollars (298 US) including taxes. AirAsia is proposing one-way tickets from 60 dollars.

How much fares will be cut on the Singapore-Kuala Lumpur sector will depend on the individual carriers but the market is big enough to accommodate new entrants, said Chew.

"We operate in a different segment of the market from the low cost carriers," he said.

"I think there's room enough for everybody... as to how far fares will be affected, it all depends on the business model of each company."