Firefly intent on growing turboprop niche

Kuala Lumpur
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Firefly will remain as a turboprop operator for at least another two years, as the Malaysia Airlines (MAS) group focuses on returning the nation's flag carrier to profitability, says Firefly chief executive Ignatius Ong.

For now, the turboprop operator is not looking at bringing jets back to its fleet, nor considering turning into a low-cost operation, he adds.

"If you want to go into the low-cost arena and compete, you can. But it's a long journey, you need to fight, and you need deep pockets to play this game. We've created our own niche and consumers sees us as a strong value proposition," Ong said in an interview with Flightglobal Pro.

Firefly briefly operated Boeing 737s to compete with Malaysia-based AirAsia in 2010, but its parent Malaysia Airlines took over in 2011 after a share-swap agreement with the low-cost carrier to stop almost 10 years of acrimonious competition. This deal was, however, terminated last April.

Since then, there have also been talks of converting Firefly into a true low-cost carrier to take on competition in the market segment. Ong admits that u-turns about Firefly's strategy have "slowed us down a bit".

"When we shut down jet operations, people thought we were shutting down Firefly. It was a tough job for me then because I had to go and tell people hey we still have turboprops," he says.

Indonesia's Lion Group also started a Malaysia-based joint venture Malindo Air this year, further intensifying competition. Besides jet operations out of Kuala Lumpur International Airport, Malindo also recently started turboprop operations out of Subang's SkyPark Terminal, becoming a direct competitor to Firefly.

Ong says that the airline has yet to see an impact from Malindo's entry, but that it will continue to be the dominant player because of its first mover advantage and good safety record.

"We have the national carrier behind us, we're not a fly-by-night company. We're here to stay," he adds. "In terms of product offering and value, I believe we're far superior, and customers know us as a reliable airline."

Ong would not be drawn into discussions on whether the MAS group still needs a pure low-cost unit to take on growing competition in the segment, saying that will be made based on "a group decision" and that the carrier will cross the bridge when it comes.

"Based on our current strategy, we need to be very focused. If you're fighting two to three fronts you may not win, but if you have the right airline which focuses on its own areas, which is what the MAS group is doing, when competitors come in, it's not going to be easy for them," says Ong.

He adds that there are no plans for an initial public offering for the next two to three years, until after the Firefly becomes "more dominant with more aircraft and a stronger network footprint".

Last year, Firefly carried 1.7 million passengers, an increase of over 10% from 2011. This year, it is confident of exceeding its "modest target" of 1.9 million. Its average load factor now stands at 70%, although during peak hours, its flights are almost always full, says Ong.

Firefly operates a fleet of 13 ATR 72 turboprops to destinations in Indonesia, Singapore, Thailand and within Malaysia from its hubs in Subang and Penang.