f dominance by the national carriers and, observers say, opening the way for wider liberalization of the region's air corridors. Malaysia-based AirAsia, which pioneered regional low-cost travel more than six years ago, was the first to make the 55-minute journey, with a morning departure from Kuala Lumpur (KL).
The flight landed at Singapore's Changi Airport about 12 minutes early with 180 passengers. They included AirAsia's chief executive Tony Fernandes and dozens of other VIPs and AirAsia officials wearing red T-shirts that said, "Finally!" Fernandes battled six years for his airline to be allowed onto the route.
"Today is a watershed in aviation history," he told reporters.
The Sydney based Center for Asia Pacific Aviation (CAPA) consultancy agreed.
"Asian aviation has shifted irreversibly into a new era of liberalization," it said in a report.
Budget carriers set the tone for competition by offering big discounts -- including some seats priced at zero dollars before taxes -- to inaugurate their new services.
A CAPA study showed traffic on the sector could grow three-fold within two years of full liberalization, resulting in massive economic benefits to both countries.
Close to 2.5 million passengers were carried between Malaysia and Singapore last year, Foo Sek Min, director of airport management for the Civil Aviation Authority of Singapore, said at a ceremony to welcome the first AirAsia flight.
With five carriers now serving the route there will be more than 250 weekly flights between KL and Singapore. Foo said he looks "forward to further liberalization" between the two neighbors.
Starting Friday, AirAsia is operating two flights a day linking KL and Singapore, while Singapore-based Tiger Airways and Jetstar have one daily flight each.
Authorities announced in November they would allow low-cost carriers on the route, which Singapore Airlines and Malaysia Airlines had dominated since 1972.
Travelers preparing to board the first budget trip out of Singapore, a Tiger Airways flight, welcomed the lower fares.
"It's a short trip, but it was cheap, so we just decided to take a flight there," said Jaiakumar Siwan, a Singaporean travelling with 20 family members to see a spiritual adviser from India.
Singapore Airlines and Malaysia Airlines have charged almost S$450 (US$317), including taxes, for a round trip.
Jaiakumar said his group paid S$150 each for a return ticket with Tiger.
Hannif Khoo, 33, a Malaysian heading home for the Lunar New Year, said he decided to fly after leaving it too late to get a bus seat. He said he paid S$290 for four people.
A one-way bus trip to Kuala Lumpur takes around five hours and costs between S$28 and S$55, including a meal and drinks -- which cost extra on the low cost airlines.
By December the route will be fully liberalized under a pact by the 10-member Association of Southeast Asian Nations (ASEAN) to remove all restrictions on passenger flights between regional capitals.
Malaysia Airlines chief Idris Jala said the December ASEAN timeline should have been adhered to, "so that everyone is ready to compete on an even footing."
Fernandes said the impact of the KL-Singapore liberalization will be far reaching.
"I would think it will change the way countries look at route rights and there will be much more liberalization going forward," he said.
"So I think it's a big step forward for mankind. Not as big as Neil Armstrong's but pretty close," he added, referring to the first man to walk on the moon.
The liberalization that began Friday "represents a remarkable policy shift on what has been the most restrictive entry regime in the region," CAPA said.
"It signals a new direction in government regulation of air services."
