Lion Air fast tracks Malindo launch, citing northern hub need

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The launch date of Malaysian carrier Malindo Airways has been brought forward two months to March 2013, with the high utilisation of new Boeing 737-900ER aircraft to form the cornerstone of its business model.

 

Malindo is intended not primarily as a Malaysian domestic carrier, but as an international airline that will serve passenger feed from Lion Air hubs in Indonesia such as Medan, Jakarta, Surabaya, Bali and Makassar, says Lion president director Rusdi Kirana in an interview with Flightglobal.

 

Announced on 11 September 2012, Malindo is a joint venture between Lion and Malaysia's National Aerospace and Defence Industries (NADI). NADI will hold a 51% stake in the new carrier and Lion will hold 49%. The airline has named Kirana's personal assistant, Chandran Ramamuthy, as its chief executive.

Malindo's revised launch date means that the launch date of Batik Air, a premium Indonesian carrier that Lion announced in June, will be pushed back from March 2013 to the third quarter of next year.

Kirana attributed the prioritisation of Malindo to the need for a hub that can channel Lion's feed for major destinations to the north. The need for a hub takes precedence over the launch of Batik, which will mainly operate premium services on point-to-point routes in Indonesia and Southeast Asia.

Kirana says Indonesians are increasingly wealthy and this has increased demand for travel to northern destinations such as China, Thailand, South Korea and Japan.

Indonesia, however, suffers from a lack of direct flights to these countries because the market is too small. This creates a case for a hub in Kuala Lumpur or Singapore that can serve the Indonesian market.

Kirana maintains that Malindo will be able to offer cheaper flights than Malaysian LCC AirAsia although it will offer premium amenities such as a 15kg (33.1lb) baggage allowance, in-flight entertainment (IFE) and a 31in (78.7cm) seat pitch. AirAsia has a seat pitch of 29.5in and operates a traditional LCC model.

"[Lion] operates nearly 75 737-900ER aircraft, meaning we are fully equipped with spares and planning," says Kirana. "We'll also fly the aircraft 16-17h [daily]. When you have leg room of 31in and IFE, you can fly for 4-5h and passengers will be happy."

He says Malindo's high utilisation rates will be achievable because of the brand new aircraft that the carrier will operate.

Lion passengers transiting at Malindo's hub at Kuala Lumpur International Airport's Terminal 2 will have a seamless connection between Lion and Malindo.

Malindo's 737-900ERs will have 168 economy and 12 business class seats. It will operate 12 737-900ERs by the end of 2013 and will receive an additional 12 in both 2014 and 2015. In 2015, it will receive five Boeing 787-8 aircraft originally intended for Batik Air, bringing its total fleet to 41 aircraft by the end of 2015.

Malindo's first two 737-900ERs will be deployed on routes from Kuala Lumpur to eastern Malaysian cities such as Kuching and Kinabalu, mainly to get Malaysians interested in the product. The arrival of the third aircraft will lead to the commencement of international operations.

Initially, Malindo will focus on short-haul international routes, but its 787s will be deployed for longer range destinations such as South Korea and Japan. The carrier is also launching a recruitment drive in Malaysia and plans to employ up to 700 personnel by 2013.

Kirana sees little point in attempting to compete with AirAsia using a traditional LCC model for Malindo. "If I offer the same product that's in the market, people will question what's the difference?" he says.