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Firefly may take MAS jets to expand

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8 scheduled airlines, what's the other one? I'm counting about 7 - MAS, AirAsia, AirAsia X, Firefly, MASwings, Berjaya Air and this newly formed Firefly Jet/Two/MAX.. was it transmile? Gading Sari? or MASkargo?

 

SilverFly ?? :pardon:

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SilverFly ?? :pardon:

Yes!!! siverfly! Because recently on their official facebook, they said they they still alive and operating flights but less publicity make they are not popular and a lot of people thought that they are already went out of business.

Edited by dean hizudy

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Decision by year-end on Firefly jet services

PETALING JAYA: Firefly, the alternative low-cost carrier for selected routes, will know by the year-end if it will commence jet services out of KL International Airport (KLIA), in addition to its turboprop flights from Subang airport.

 

Sources indicate the outcome from Firefly wanting to utilise parent company Malaysia Airlines’ (MAS) B737-400 planes for Firefly’s expansion plans, which may include Asean routes, should be known soon.

 

While FlyFirefly Sdn Bhd managing director Datuk Eddy Leong decline to comment on this matter, he did say that the carrier had submitted an application to the relevant authorities for expansion of its operations.

 

“We will furnish more information once the approvals are obtained,” he said in an e-mail response to StarBiz yesterday.

 

With MAS identifying Asean as the group’s main growth region under its business transformation plan, Leong said Firefly was evaluating various options to match its product with the differing market segments.

 

MAS, which now leases 37 units of B737-400 aircraft, is set to decommission and replace these planes with new B737-800s as part of its fleet renewal strategy that runs into 2015. MAS will be taking delivery of its first B737-800 aircraft next week from Seattle, the United States.

 

To facilitate the expansion plans of its wholly-owned unit Firefly, MAS may continue to lease the B737-400s and charge Firefly a fee for the utilisation of these planes as opposed to buying new aircraft for Firefly.

 

This is due to MAS’ own cashflow and balance sheet needs considering that it is taking on new aircraft over the next few years: 35 B737-800s (with option for another 20) and 15 A330-300s (option for another 10).

 

MAS managing director and chief executive officer Tengku Datuk Azmil Zahruddin has previously said that the airline did not rule out the possibility of passing the B737-400 aircraft to Firefly for the latter’s future expansion needs.

 

Firefly, which currently operates seven ATR 75-200s for domestic routes, Singapore, Thailand and Indonesia, will take delivery of another two ATRs by the year-end and another by January next year.

 

It has also recently announced plans to buy another four ATRs and aims to increase its frequencies of existing routes with the ATR planes.

 

A recent daily report suggested that Firefly may look to expand to Asean markets in future, based on an anonymous advertisement carried in a daily seeking positions for pilots with ATR and Boeing 737 experience to be based at Subang Airport and KLIA.

 

The advertiser described itself as a leading regional airlines owned by a public-listed company with the government holding a majority stake.

 

“For Malaysia Airlines, the B737-400 planes are no longer viewed as a quality product and competitive if you were to compare with airlines such as AirAsia and Singapore Airlines,” observed an aviation analyst, who declined to be named.

 

The analyst, who is attached to a local research house, said the fuel consumption of these older Boeing aircraft was higher, at an average of 10% to 15% more per seat basis than the newer models.

 

He also added that the market valuation for the B737-400 planes were much lower than new aircraft, such as the A320.

 

“If you look at market valuation for an A320 now, it is about US$42mil compared with a B737-400, which is roughly between US$3mil and US$4mil,” he said.

 

A consideration for MAS in passing over its older Boeing aircraft to Firefly would be the potential routes that the latter will ply, to avoid direct competition between both airlines.

 

Analysts said Firefly would probably fly secondary routes, therefore competing directly with budget carrier AirAsia.

 

“With the airline industry being a commodity now, pricing point will be the biggest decision maker for customers in choosing the airline,” said the local research house analyst.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/10/7/business/7175665&sec=business

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Why FY need to wait til year end? If the business model is feasible and resources is available, should start immediately. More choice for consumers, the better :good:

 

Given FY will be plying secondary routes, hope FY won’t limit their fleet to 734 only but consider to add 50 to 100 seat regional jets.

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If Firefly adds B737-400 to its fleet of ATR72s ... and as suggested, adds another fleet of 50-100 seater regional jets, it will lose what was considered one of the key pillar of LCC operation - a homogenous fleet of a single type.

 

How this will affect its ability to keep costs low would be a moot point. If the B734s are for Firefly to service ASEAN destinations, it is inevitable that it will run into competition with its parent company, unless like SIA and SilkAir, the parent company - MAS - lets Firefly operates some of the routes where a lower cost operation is deemed more crucial. If this happens, perhaps MAS should also allow MASWings to operate some B734s between East Malaysia (BKI and KCH) and Singapore.

 

KC Sim

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If Firefly adds B737-400 to its fleet of ATR72s ... and as suggested, adds another fleet of 50-100 seater regional jets, it will lose what was considered one of the key pillar of LCC operation - a homogenous fleet of a single type.

 

Jetblue have a mixed fleet of Embraers & Airbus A320. Doesn't seem to affect them in the least bit.

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If Firefly adds B737-400 to its fleet of ATR72s ... and as suggested, adds another fleet of 50-100 seater regional jets, it will lose what was considered one of the key pillar of LCC operation - a homogenous fleet of a single type.

 

Most if not all agree, frequency is the key to success in aviation industry and daily service is more likely to sustain and higher yield. Most if not all MH failed routes are half heartily non daily service.

 

734 leasing and operation cost is about the same for MH or FY.

 

By default, secondary routes lack volume. If demand is justified on these routes, MH would have operated these routes with 734 profitably.

 

In order for FY to fill the aircraft with reasonable yield, FY may need to provide daily service with a smaller aircraft.

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MAS will be taking delivery of its first B737-800 aircraft next week from Seattle, the United States.

 

Are you kidding me?

 

That sounds right. Currently, they're leasing 737-800.

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That sounds right. Currently, they're leasing 737-800.

 

I guess it would be more appropriate and accurate if they input "new".

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Most if not all agree, frequency is the key to success in aviation industry and daily service is more likely to sustain and higher yield. Most if not all MH failed routes are half heartily non daily service.

 

734 leasing and operation cost is about the same for MH or FY.

 

By default, secondary routes lack volume. If demand is justified on these routes, MH would have operated these routes with 734 profitably.

 

In order for FY to fill the aircraft with reasonable yield, FY may need to provide daily service with a smaller aircraft.

Regional jets are not an option since FY already has something between 50 to 100 seats, the 70 seat ATR-72. If it needs something smaller, the only option for low fleet opex would be the ATR-42. B734 does make some sense because lease cost will be very low - so total operational costs would be OK. It is a nice step up to 130 seats, if it retains the MH configuration. The main problem with FY's business model is that it will operate out of KLIA, and pax cannibalisation from MH will be inevitable. However, MH might not be too bothered with that as long as it also cannibalises pax from AK, FD and QZ. No one knows if this will work. We just got to wait and see...

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If FY is to emulate LCC business model, FY will cannibalize both AK and MH market share. Eventually, either MH will transfer most domestic and regional routes to FY or AK suffered from almost unlimited resources of a GLC.

 

Believe MH and FY should instead study KL and LH business model, the main line is feed by regional. FY can skim off high yield pax from AK and to feed MH.

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Let all the airliners compete healthly without restriction and prejudice over each other. Only this can help the growth of KLIA to be the major hub in the region.

 

It just happened to Singapore imposes no restriction on Qantas to expand their Kangaroo routes with Airbus 380.

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MH is currently operating domestic routes on contract for PMB. Will this contract be novated to FY?

 

 

If FY is given profit guarantee like MH, will this be fair to AK? Will MH give up this profit guarantee?

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KK Lee, I don't understand with your "profit guarantee". Do you mean the government will intervene fully in this matter to ensure and protect FY to be granted with "profit guarantee" on the domestic route?

 

Such approach sounds like restriction is going to incure on AK. E.g. AK plies 11 times daily on KUL - KCH. Does it mean the government has to order AK to reduce frequency at once and increase surcharge on this route so that FY can ply more frequencies and offer lower cost?

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KK Lee, I don't understand with your "profit guarantee". Do you mean the government will intervene fully in this matter to ensure and protect FY to be granted with "profit guarantee" on the domestic route?

 

Sounds more like subsidies to me.

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Regional jets are not an option since FY already has something between 50 to 100 seats, the 70 seat ATR-72. If it needs something smaller, the only option for low fleet opex would be the ATR-42.

 

Believe turboprop is banned from KUL, hence ATR won’t be in FY’s KUL equation.

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Believe turboprop is banned from KUL, hence ATR won’t be in FY’s KUL equation.

That is why they are flying the B734s from KUL - cos MH has the MRO capability to maintain them at low cost. A new aircraft type will mean that the maintenance costs will be higher. So total CAPEX and OPEX will be lower.

 

Let all the airliners compete healthly without restriction and prejudice over each other. Only this can help the growth of KLIA to be the major hub in the region.

 

It just happened to Singapore imposes no restriction on Qantas to expand their Kangaroo routes with Airbus 380.

Yes, I agree. Free and fair competition should be encouraged as it encourages airlines to improve and offer better value to its customers.

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That is why they are flying the B734s from KUL - cos MH has the MRO capability to maintain them at low cost. A new aircraft type will mean that the maintenance costs will be higher. So total CAPEX and OPEX will be lower.

 

734 leasing and operation cost is about the same for MH and FY. What can FY do that MH can’t?

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I can fully see the business case for the B737-400 to be introduced into Firefly's operation out of KUL. But the suggestion of a regional jet adds a third type into this airline (as alluded to by Francis Lee, the 70-seater ATR72 covers the 50-100 seat segment).

 

Let me throw in a totally different thought. If Firefly truly sees growing towards jet operation plus a little more capacity, perhaps it should be looking at the Embraer E-170 or E-190 (and use the B734 only for a bridging period of time). In the medium term, it should have more than 2 aircraft types.

 

Comparison with jetBlue is irrelevant simply because it has the economies of scale that Firefly does not. Even then, jetBlue was very cautious in introducing the E-jets and undertook that move only after having studied the relationship between increased cost of maintaining a mixed fleet and the new city pairs that a second (and smaller capacity) aircraft type opens up.

 

Regarding MAS' domestic operation, if I remembered clearly, the Malaysian government at the time it assumed MAS' debt and assets some years ago made an agreement for MAS to be paid a fee for operating the domestic routes. This meant that beside taking care of the cost of operating these routes, PMB or the government remunerates MAS for such operation and this amount literally is the profit for such operation. What I do not know is how revenue from such domestic operations is entered into the accounting books. Is this revenue shared between MAS and the government/PMB or does it go to just one set of books?

 

Regarding delivery of new-built B737-800s from Boeing, can anyone confirm that 9M-MLG is the first new-built B738 for MH? And if this is, then the aircraft was already delivered on 26 September and I saw it landing on runway 14R and it proceeded directly to the MH hangars.

 

KC Sim

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Regarding delivery of new-built B737-800s from Boeing, can anyone confirm that 9M-MLG is the first new-built B738 for MH? And if this is, then the aircraft was already delivered on 26 September and I saw it landing on runway 14R and it proceeded directly to the MH hangars.

New-build, but one of the leased birds; 9M-MLG is 737-8FZ

Delivery flight covered here in another thread :)

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Decision by year-end on Firefly jet services

by Natalya on Oct.07, 2010, under General, News

 

Thursday October 7, 2010

 

PETALING JAYA: Firefly, the alternative low-cost carrier for selected routes, will know by the year-end if it will commence jet services out of KL International Airport (KLIA), in addition to its turboprop flights from Subang airport.

 

Sources indicate the outcome from Firefly wanting to utilise parent company Malaysia Airlines’ (MAS) B737-400 planes for Firefly’s expansion plans, which may include Asean routes, should be known soon.

 

While FlyFirefly Sdn Bhd managing director Datuk Eddy Leong decline to comment on this matter, he did say that the carrier had submitted an application to the relevant authorities for expansion of its operations.

 

“We will furnish more information once the approvals are obtained,” he said in an e-mail response to StarBiz yesterday.

 

With MAS identifying Asean as the group’s main growth region under its business transformation plan, Leong said Firefly was evaluating various options to match its product with the differing market segments.

 

MAS, which now leases 37 units of B737-400 aircraft, is set to decommission and replace these planes with new B737-800s as part of its fleet renewal strategy that runs into 2015. MAS will be taking delivery of its first B737-800 aircraft next week from Seattle, the United States.

 

To facilitate the expansion plans of its wholly-owned unit Firefly, MAS may continue to lease the B737-400s and charge Firefly a fee for the utilisation of these planes as opposed to buying new aircraft for Firefly.

 

This is due to MAS’ own cashflow and balance sheet needs considering that it is taking on new aircraft over the next few years: 35 B737-800s (with option for another 20) and 15 A330-300s (option for another 10).

 

MAS managing director and chief executive officer Tengku Datuk Azmil Zahruddin has previously said that the airline did not rule out the possibility of passing the B737-400 aircraft to Firefly for the latter’s future expansion needs.

 

Firefly, which currently operates seven ATR 75-200s for domestic routes, Singapore, Thailand and Indonesia, will take delivery of another two ATRs by the year-end and another by January next year.

 

It has also recently announced plans to buy another four ATRs and aims to increase its frequencies of existing routes with the ATR planes.

 

A recent daily report suggested that Firefly may look to expand to Asean markets in future, based on an anonymous advertisement carried in a daily seeking positions for pilots with ATR and Boeing 737 experience to be based at Subang Airport and KLIA.

 

The advertiser described itself as a leading regional airlines owned by a public-listed company with the government holding a majority stake.

 

“For Malaysia Airlines, the B737-400 planes are no longer viewed as a quality product and competitive if you were to compare with airlines such as AirAsia and Singapore Airlines,” observed an aviation analyst, who declined to be named.

 

The analyst, who is attached to a local research house, said the fuel consumption of these older Boeing aircraft was higher, at an average of 10% to 15% more per seat basis than the newer models.

 

He also added that the market valuation for the B737-400 planes were much lower than new aircraft, such as the A320.

 

“If you look at market valuation for an A320 now, it is about US$42mil compared with a B737-400, which is roughly between US$3mil and US$4mil,” he said.

 

A consideration for MAS in passing over its older Boeing aircraft to Firefly would be the potential routes that the latter will ply, to avoid direct competition between both airlines.

 

Analysts said Firefly would probably fly secondary routes, therefore competing directly with budget carrier AirAsia.

 

“With the airline industry being a commodity now, pricing point will be the biggest decision maker for customers in choosing the airline,” said the local research house analyst.

 

Source : http://blog.fireflyz.com.my/2010/10/decision-by-year-end-on-firefly-jet-services/

Edited by Ikman Ikreza

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