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Showing posts with label Lion Air. Show all posts
Showing posts with label Lion Air. Show all posts

Wednesday, September 12, 2012

Lion into Malaysia - Who is the target?

AirDrama: As Lion enters Malaysia with Malindo, could Air Asia be in
denial that it is the target and continue to slag off Malaysia Airlines?

(Artwork by: Rimanti N)
  • Malindo's Malaysian shareholder is National Aerospace & Defence Industries, a state owned enterprise. They don't just go and set up companies with foreign partners just to compete with local fellow state owned enterprises do they? Just who is Malindo targetting? State owned Malaysia Airlines + Firefly because the politicians are frustrated at 'lack of progress' there? Or Air Asia (OK, did Tony Fernandes peeve off some politicians?)?
  • As Air Asia becomes stronger regionally, Tony will have to spend less time on the home turf Malaysia... is this peeving some politicians off? Elections are coming up in Malaysia, no?
  • Malindo's announcement yesterday, was attended by Malaysian Prime Minister Najib. Elections are coming up, and Tony Fernandes has run off to Jakarta... is Najib peeved off?
  • Within 24 hours of the Malindo Airways announcement, Lion Air opened its Bandung-Kuala Lumpur route, head-to-head with Air Asia group. Timing is rather suspicious.

Air Asia's Tony Fernandes was quick to tweet:
"I think Malindo is more problematic for Malaysian Airlines not AirAsia. We have very strong position in Malaysia and are really a regional company."
While I generally agree to that tweet, I wonder, perhaps his habitual slagging off of Malaysian Airlines is peeving the Malaysian politicians off?

Coincidentally, today, Tony Fernandes' other slagging victim, Tiger Airways, announced better financial results. Tiger itself is trying to set up bases around the region. As the big cats grow, could their feline ambitions be aimed at Air Asia while Tony's confidence elude Air Asia's minds from the possibility? I guess I have to wait until Tony starts slagging off Jetstar (if he has, I must have missed it!) to figure it out.

Although there is one thing I agree with Tony Fernandes regarding Malindo Air:
"Why is the airline not called Lion Air Malaysian. Strange"


Tuesday, September 11, 2012

Malindo Airways: Lion Air makes its roar heard in Malaysia


Indonesia's Lion Air and Malaysia's National
Aerospace & Defence Industries join hands
to set up Malindo Airways in Malaysia
Lion Air has confirmed plans to set up Malindo Airways in a partnership with Malaysia's National Aerospace & Defence Industries.

Several interesting key points were made in the event:
  • Malindo will provide a hybrid service (between LCC and full service carrier).
  • Base will initially by at KLIA2, the future home of Air Asia Malaysia
  • Malindo will start in May 2013 with 12 737-900ERs with 12 business class seats and 168 economy, with IFE and WiFi.
  • Malindo aims to add 12 aircraft a year and hit 100 aircraft in 10 years.
  • 787s will be introduced in 2015.
  • Prices for tickets and services is aimed to be on par if not lower than Air Asia.

What this means for Lion Air and possible factors:
  • Lion Air sees that its growth in Indonesia needs to slow down due to infrastructure limitations such as airport aircraft parking space are running out nationwide.
  • Lion still have A LOT of aircraft to be delivered, and they have to be used somewhere, these aircraft will now go to Malindo and to a certain extent, Batik Air.
  • The 787s slated for Batik Air is likely to go to Malindo first, Lion is negotiating for more 787s for Batik Air.
  • Lion Air sees that if it wants rapid growth, it must be done outside Indonesia. This is nothing new to Lion Air, but previous attempts to set up subsidiaries outside Indonesia have so far failed (in my opinion, due to picking the wrong partners). Malindo seems to be the most realistic one yet (and I believe it will happen).
  • Growth on the premium sector through Batik Air will not be as rapid as desired, again, due to limitations on infrastructure in Indonesia.
  • This announcement effectively put an end to the previous rumored Malaysian joint venture, Lion Berjaya Air (And unless there's another announcement, Lion Air Australia is effectively scrapped).

On the Malaysian competitors...
  • Air Asia will now have serious competition. Insiders have said that Air Asia's Tony Fernandes isn't afraid of Lion Air in Indonesia, but sees non-LCC developments of Lion Air (such as Malindo and Batik Air) as a threat.
  • Firefly needs to set its direction and stick to it, lounging around between jets and props isn't going to get them anywhere against Air Asia, and with Malindo, the might end up being the loser.
  • Malaysia Airlines will only face more challenges. Its entry into OneWorld is already being questioned by some after it's alliance sponsor Qantas decided to dump British Airways and went for Emirates. Malindo will only erode further on its short haul yields.

Looking back over the years, Lion Air have announced many plans to set up joint ventures and/or subsidiaries outside Indonesia, none of which have come to fruition. Malindo appears to be Lion's boldest move yet, with a reputable local partner in the form of NADI, and the ceremony was attended by Malaysian Prime Minister Najib.

This time around, it seems that Lion Air is planning serious business outside it's den.

Tuesday, April 10, 2012

The Merpati Question Part 2: Predators vs Pigeons


The plight continues...
It is almost a year since I wrote "The Merpati question: How do you rescuscitate a dead pigeon" and Merpati is now coming up to its 50th anniversary.

Whilst the turnaround at the prime state owned carrier Garuda, is now beginning to finally produce profits, Merpati remains in limbo. I wonder how much more things can go wrong there...

The CEO's rant at the parliament's 6th commission last year of "Look at Air Asia. One should look and ask if any regulations have been violated. (If not, then) The regulations should be reviewed. There is no way for anyone to operate the A320 profitably on short haul!" seems to have been followed by Merpati planning to add A320s to its fleet middle of this year. Bizarre!

Then in October last year, state oil company Pertamina refused to supply fuel on credit to Merpati, citing fuel debts of $62.15 million. Fuel supply was restored when the state's Asset Management Company (PT Perusahaan Pengelola Aset) guaranteed restructuring of the debt worth $63.39 million.

Is the MA-60 the current flagship
of Merpati?
In February, they also signed an MOU with COMAC for 40 ARJ21-700 at the Singapore Air Show. If the deal goes ahead, this would be the biggest order for the type outside China. However, it appears that COMAC didn't want the signing to be well publicized outside China and Indonesia, asking for the journalist present not to publicize it. However, the signing made news allover Indonesia. It all sounds strange, but after all, Merpati is also the largest operator for the AVIC MA-60, and many still question the decision to go for that aircraft type.

Then, came the video for Merpati's upcoming 50th Anniversary, uploaded on 4th April 2012.


In short, I think the video meant:
"We screwed up in the past, so we now have to make it better. We're sorry, and change, is the only way for Merpati to survive. So, we've got comfortable MA-60s now, so what we have to do is to fill it with passengers with no excuses! So let's get to work." The video ends with a quote, "Doing the impossible!"

Garuda could end up operating the
Dash8-Q400
The talk on whether or not Merpati should be saved continue as we speak. Much of the principle business question is, "what role should be filled by Merpati, as a state owned company." But before a consensus short list of answers can be gained, a major threat to Merpati's future came today with Garuda's announcement published in Flightglobal, that it plans to buy either the ATR72 or Bombardier Q400 for low-density routes in eastern Indonesia.


A Wings Air ATR72 about to land
at Denpasar's Airport, Bali
While this plan will bring Garuda in direct competition with Lion Air group's ATR operations under Wings Air, citing the words "to serve low-density routes in eastern Indonesia" means Garuda intends to attack Merpati's bread and butter market (whatever is left of it)!

So, as Merpati's 50th anniversary is coming up, the giant mythical eagle, the Garuda, plans to attack the pigeon and the pigeon (a.k.a. Merpati) still hasn't recovered from the ATR onslaught of Lion, which coincidentally was announced near Merpati's 45th anniversary, 5 years ago.

Is the pigeon able to defend itself from the eagle and the lion? Could it be better to simply stop feeding steroids to the pigeon and just cook it while it still has value? Or is it better to continue feeding it, only to be eaten alive by the eagle and the lion?

Sunday, June 12, 2011

Low levels of trust between the passengers and the airlines equals strange mishaps!

I was sent an interesting picture the other day...


It was taken by one of the passengers onboard that aircraft...

When the aircraft pushed back and started its engines, a tailpipe fire occured. The residual fuel in the combustion chamber and turbine blades of a jet engine produces smoke and fire on the next engine start. Whilst it's no big deal, it could cause concern for those who never saw one and do not know what it is. Normally, if someone raised the concern, the cabin crew would just assure them that it is normal... unless you're in Indonesia.

On this Garuda flight, a passenger panicked and immediately ran to the door, opened it and deployed the slide. The result was a delay for the other passengers. The scheduled 1445 departure, left finally at 1750, after an aircraft change. The costs to the airline, a new escape slide, and meals & drinks compensation for the other passengers.

Why didn't the passenger heed to the cabin crew's call to remain calm? The answer lies in Indonesia's airline industry history since 2000. The boom in the industry meant 2 things:
1. Accidents.
2. Lots of incidents.
3. Lots of delays.
4. Lots of stress for the passengers.
5. Passengers losing trust but still flying.

Whilst the first 3 can be solved by proper enforcement of the operating regulations and industry best-practice preventative measures, the latter 2, are tricky.

What didn't help was the industry's method of "hush-hush" and "just tell them a lie and the rants will go away" to solve problems between 2000 and 2007. Whilst not all airlines are guilty, the multiplier effect of just 1 frontline staff doing it, cannot be underestimated.

The multiplier works by other staff thinking, "hey, that worked, so I'll start doing that too!" Then the line managers starts adopting the same method and before you know it, several companies would adopt the same method.

Sweeping the problem under the carpet works in the short run. Eventually, one will just go too far and the passenger snaps the weakened chain of trust. The airline most guilty of doing this was the now-defunct Adam Air... and one other carrier who allegedly utilize the method on a regular basis, still exist, and is still flourishing somehow (no, it's not Garuda).

What airlines need to know is that even if the passengers hate you, put the price low enough and the haters will still fly with you. If they've had enough, they don't stop flying, they fly someone else. Unfortunately, they bring their trauma and distrust along with them even when they fly someone else!

Whilst the industry's safety record has improved significantly since 2007, my perception seems to indicate that incidents of "unruly/panicked passengers" are on the increase. The lag of the peak of occurences can be understood, but does the industry realize this?

Last year (I think), a tailpipe fire resulted in the same thing... 1 Batavia Air passenger panicked, overwhelmed the crew, and opened the door and jumped out. Since 2007, this appears to have occured at least once a year, but the other ugly behaviours are increasing.

Delays (even by weather), now begin to produce increasingly confrontative and angry passengers. Just last week, we had 2 crew members walking through the terminal were "detained" by passengers who held the hostage unless their delayed flight, departed immediately. A few months ago, a passenger on a rampage after "attempts to hush" him failed and several terminal information displays were destroyed along with 1 x-ray machine giving up after it was bumped during the rampage.

This does not limit itself to "bad carriers", Garuda suffered this, Air Asia also had "passengers detaining crew" due to delays (despite winning the Best Low Cost Carrier award). A Sriwijaya Air tech delay resulted in Jambi Airport being taken over by its passengers to prevent the crew from leaving the airport 1 - 2 years ago... The worst case, was around that same time when a Sriwijaya Air passenger was denied boarding in Ambon and he decided to call his friends in Jakarta to do a drive-by shooting at the airport...

And these are just the stuff I hear or made it to the news... I dare not think how many other cases had occured. But what surprises me the most is when I discuss it with people working at the airlines or the airport, their reaction was, "How do you know?" or "Hey, you're not supposed to know that!"

As long as there are those preferring to hide these kinds of problems and incidents, no matter how minor, it's a safe bet that "silly incidents" will increase! I wonder how long/short we'd have to wait until someone does get killed at the airport for some silly/insignificant altercation or delay...

But, in the meantime, let's be relieved that no Tristars (God Bless them!)are in service in Indonesia! Just have a look at the following:



Photos by: Mick Bajcar, Lasse Lehtonen and Viktor Laszlo via Airliners.net


With engine starts like those, and the passengers we get in Indonesia these days, am sure aircraft escape slides would be a best seller if Tristars are in service today!!!!!

And with starts like this:



 Photo by: Mathias Henig via Airliners.net

They might as well open their own slide production plant next to the airport!

As bad as all the stories I hear about passenger service in the US, those frontline staff there should feel lucky they're not in Indonesia!

The Holidays are coming!
Stay Calm Everyone!