Malaysia is committed to seeing both budget carrier AirAsia and flag carrier Malaysia Airlines achieve healthy growth, a senior minister said today.

"We want both the airlines to grow," Transport Minister Chan Kong Choy told AFP.

Chan said the government would assist profitable AirAsia find new destinations, including the lucrative Kuala Lumpur-Singapore service, to which the budget carrier wanted access.

"I would like to see AirAsia fly to all destinations. We will assist," he said when asked about the Singapore route. He did not eloborate.

Chan's comments come amid a controversial decision by the government to allow Malaysia Airlines to offer discounts on its much reduced domestic network despite strong opposition carrier AirAsia.

'Total deviation'

Allowing Malaysia Airlines to do this did not violate the carrier's rationalisation programme, under which it will retain only a few local routes, the minister said on Wednesday.

AirAsia on Monday said allowing Malaysia Airlines to offer such discounts was unfair and a "total deviation" from an agreed plan to share those services as part of the loss-making flag carrier's restructuring.

Under a new aviation policy which takes effect on August 1, AirAsia is to take over 99 of Malaysia Airlines' domestic routes, many of which are currently losing money.

Malaysia Airlines will now operate 22 domestic services, including three new routes to Borneo island as part of its restructuring, in addition to its international routes.