Earlier this week I interviewed Lion Air’s president director Rusdi Kirana and I must say I was impressed with how Lion Air has been growing its business.
Lion Air is the largest privately-owned carrier in Indonesia and is arguably the airline that all the Indonesian carriers – including Garuda – are trying to beat.
The carrier is also unique – because unlike a lot of airlines in other parts of the world – it is not fixated with launching new international services. Instead, it is focused on Indonesia’s huge domestic market.
Rusdi told me that Lion Air’s most profitable routes are its domestic routes such as Jakarta-Surabaya. He says Lion Air has 11 flights a day on that route and the passenger load factor is around 90%. Lion charges low fares but with that volume of traffic it can make a lot of money, he says.
He also says life is going to become increasingly difficult for Indonesia’s smaller commercial airlines. A few years ago, the Boeing 737-200 and the Boeing MD-82 were the mainstay of many Indonesia carriers’ fleets. But now with airlines such as Lion Air operating new 737-900ERs and other large competitors such as Garuda operating 737-800s, Rusdi says it is hard for smaller airlines to compete with such old equipment.