ANALYSIS: CSeries would help Lion Air move away from congested hubs

This story is sourced from Pro
See more Pro news »

Lion Air’s plan to obtain the Bombardier CSeries CS300 aircraft would help the carrier better tailor capacity on long, thin routes and aid its strategy of bypassing congested hubs such as Jakarta.

There is still a good deal of uncertainty around the potential order, which could be made at next year’s Farnborough air show. Although Lion's president director Rusdi Kirana has voiced warm words of support for Bombardier’s new aircraft, a deal has apparently yet to be finalised. Details about financing and in-country aircraft servicing are still being ironed out.

The number of aircraft has yet to be ascertained, and it is unclear how they could be configured. A special, high density version of the CS300 can carry 160 passengers. It is also not clear how the aircraft would be allocated among the Lion Group, which includes Lion Air, Batik Air and Malaysia’s Malindo. Lion will also launch a Thai low-cost start-up called Thai Lion at the end of 2013.

Nonetheless, examination of Lion’s route network with FlightMaps Analytics gives some idea of why Kirana is upbeat about Bombardier’s new aircraft.

Excluding Lion’s pilgrimage flights to Saudi Arabia, Lion’s entire network falls well within the 5,463km (2,950nm) range of the CS300. Lion already serves a number of long, thin domestic routes between 1,000km and 4,000km distance.

One good example is the 1,765km Surabaya-Ambon route, which Lion now serves daily with the Boeing 737-900ER. Another is the 1,667km flight between Surabaya and Manado, on which Lion now deploys 737-800 aircraft twice daily. On such routes, the CS300 would offer Lion the option of downgrading capacity from 737s – and the carrier’s future fleet of Airbus A320s – if necessary.

The CSeries would come into its own, however, by avoiding the big hubs of Jakarta and Surabaya on the island of Java, and link smaller cities directly, potentially opening up entirely new markets.

FlightMaps shows, for example, that no Indonesian carrier offers direct services between Medan and Manado, two big cities that aspire to be the western and eastern air hubs of Indonesia. Indeed, Lion is keen to develop Manado as hub linking Indonesia to north Asia.

Lion routes between 1,000km and 4,000km

asset image

FlightMaps Analytics

Medan’s linkages to eastern Indonesia are virtually non-existent. Similarly, Manado has no direct air links to destinations on the island of Sumatra. An aircraft like the CS300 would be suitable for opening these markets.

The CS300 could also help open up long, thin international routes from secondary Indonesian cities. The aircraft’s range would allow it to reach northeast Australian cities such as Cairns and the Gold Coast from western Indonesia. Likewise, the aircraft could open markets in China and India directly from Sumatra.

If Lion’s CS300 order moves forward, it will be a huge boost for the programme, which has had a difficult 2013 owing to delays of its first flight. It would also mark an important tactical shift for Lion, in which it complements the economies of scale it enjoys on Indonesia’s major trunk route with profitable point-to-point services between secondary cities in Indonesia and the broader region.