Firefly may take MAS jets to expand

[flee 5]

Frankly I am not able to see how FY can compete with AK. They just do not have the economies of scale. Every time I check ticket prices for flights from SZB, FY ends up being more expensive. So I think FY should really think hard about this project. If they plan to use the same pricing model, then their fares will not be competitive.

 

Still, I do like the idea that MH and FY should have roles to play. I think their model is closer to the SQ-MI relationship model. As such, it should not be inconceivable that MH surrenders all its B737 routes to FY while MH focuses on operating only the wide body fleet.

[fenandri 3]

firefly should retain their ATR in subang and 'charge' more than AK. operate the 737 in LCCT and compete with AK

[Sanjay Thaker 0]

How is it that they are not bothered about the bigger guys eg SQ/CX? Ever wondered why SQ created the Silkair brand to fly into smaller regional airports rather than just purchasing the narrowbody fleet and operating it under the SQ brand? The Asia Pacific region is poised for a dramatic growth in passenger numbers. Most of which would come from the smaller regional airports rather than the more mature 'main' airports of a particular country. Using FY to serve such regional airports would be wise if it is used to tap into the growth, giving pax the convenience of boarding the flight from an airport closer to home, bringing them to KUL to board a MH aircraft and fly out of the region. This makes sense and is obviously not possible using an ATR with its range constraints. I believe FY can maintain their SZB hub for turboprop ops, and a KUL hub for regional flights.

[mokhzani 0]

Heard on the radio today, FY is not taking the 734....

[GeO 0]

I thought the B734 would go to MAS Wings????

[Mohd Azizul Ramli 2]

First of all, thank you to the moderator for removing this thread to the subforum where it belongs.

 

This is the take on the issue by a very prominent A.Net member that I would like to share:

 

This strategy (it's still a sources story of course) raises lots of questions.You could be right about the possibility of FY maintaining a dual KUL-SZB hub, but that means quite a bit of overlap if MH also keeps its B738s, especially on short 1-2 hour hops: there's FY out of SZB, then FY out of KUL, then MH out of KUL... are there enough profitable routes for them all to fly? I'll have my doubts.

 

Then there is a question of FY flying the ageing B734s - aren't they getting a bit long in the tooth? I would have thought it'll make sense for FY to take over some of the new B738s and selected shorthaul MH routes as well, kinda playing the role SIlkAir does for SQ. Makes lots of sense if the cost base of FY is lower than MH. Going head-to-head with AK could be difficult (I was about to write 'suicidal'), but it'll make it very exciting for spectators like us.

[BC Tam 2]

I thought the B734 would go to MAS Wings????

Not a good idea - we may not have enough idle parking bays here in Borneo to cater for the upcoming deluge of retired old birds

[Ja Singh 2]

so what u expect firefly will expand with? another ATR plane?

MH need to compete with airasia, so they need boeing 737 to fly to longer routes like jakarta, bangkok, denpasar, kotakinabalu,,

 

In this case firefly should take over all MH 738's and then operate as a regional airline. MH only concentrate for flights above 3 hours and operate A330's.777's and A380's.

[KK Lee 5]

Why need to restrict FY to ATR, 734 or 738 only? Why FY can’t model after other regional airline by operating ERJ135, 145, CRJ200, CRJ700? All major airline in Europe and US e.g. LH, KL, AF, BA, UA, CO, AA, DL, etc are feed by regional.

 

[Ja Singh 2]

Why need to restrict FY to ATR, 734 or 738 only? Why FY can’t model after other regional airline by operating ERJ135, 145, CRJ200, CRJ700? All major airline in Europe and US e.g. LH, KL, AF, BA, UA, CO, AA, DL, etc are feed by regional.

 

What metal MH have in hand and will soon have is 734 and soon 738,Aquiring Embrear needs a lot of money to be spent to set up such as training cost and spares.If FY has the capital(not tax payers money) that they can very welll purchase that aircraft and become a regional airline.

 

Lee in this case do they then overlap the routes of MH?Doesnt make sense.

[BC Tam 2]

If FY has the capital(not tax payers money) .....

Where do you think FY's money came from ?

[fenandri 3]

Firefly may take MAS jets to expand (from NST)

 

MALAYSIA Airlines (MAS) (3786) is evaluating the potential of allowing wholly-owned FlyFirefly Sdn Bhd to operate its B737-400 planes when it replaces its fleet gradually from the end of this year.

 

The national carrier will receive three of its B737-800 this year and the next. It will also receive five A330-300 and another five A380 next year.

 

Sources said that Firefly would either lease or buy up to 35 of the used MAS jets, and would use the aircraft for short-range domestic and regional routes.

 

The plan is expected to take off from December this year until the end of 2013 when MAS stops using the B737-400.

Business Times has learnt that Firefly may either operate the Boeings from the KL International Airport (KLIA) or the new Low-Cost Carrier Terminal (LCCT).

 

The airline is believed to have already contacted Malaysia Airports Holdings Bhd (MAHB) about reserving slots for the additional planes at the new LCCT.

 

"It is likely that Firefly will opt for KLIA, which is currently under-utilised, as this will enable the airline's passengers to connect seamlessly on their onward journeys," a source said.

 

Firefly, which was set up by MAS three years ago, currently operates ATR 72-500 turboprops from its hubs in Subang and Penang.

 

Besides using the jets to add capacity and frequencies to the domestic routes it serves (and also those of MAS), Firefly is also likely to add new destinations like Macau, Jogjakarta, Haadyai, Bandung and Chiangmai, which are not served by MAS at present.

 

In addition, Firefly may ply routes where MAS is facing intense competition from low-cost carriers.

 

These include routes like Kuala Lumpur-Medan, Penang-Medan, Kuala Lumpur-Singapore and Penang-Singapore.

 

"As a new airline operating out of KLIA, Firefly will be entitled to many incentives from MAHB and this could result in lower operating costs which could then be transferred to even lower fares," the source said.

 

Firefly currently has a staff headcount of 350. If the plan to use the jets in addition to the turbo-props materialises, the airline is set to boast a headcount of 1,500 in four years.

[fenandri 3]

Firefly may take MAS jets to expand (from NST)

 

MALAYSIA Airlines (MAS) (3786) is evaluating the potential of allowing wholly-owned FlyFirefly Sdn Bhd to operate its B737-400 planes when it replaces its fleet gradually from the end of this year.

 

The national carrier will receive three of its B737-800 this year and the next. It will also receive five A330-300 and another five A380 next year.

 

Sources said that Firefly would either lease or buy up to 35 of the used MAS jets, and would use the aircraft for short-range domestic and regional routes.

 

The plan is expected to take off from December this year until the end of 2013 when MAS stops using the B737-400.

Business Times has learnt that Firefly may either operate the Boeings from the KL International Airport (KLIA) or the new Low-Cost Carrier Terminal (LCCT).

 

The airline is believed to have already contacted Malaysia Airports Holdings Bhd (MAHB) about reserving slots for the additional planes at the new LCCT.

 

"It is likely that Firefly will opt for KLIA, which is currently under-utilised, as this will enable the airline's passengers to connect seamlessly on their onward journeys," a source said.

 

Firefly, which was set up by MAS three years ago, currently operates ATR 72-500 turboprops from its hubs in Subang and Penang.

 

Besides using the jets to add capacity and frequencies to the domestic routes it serves (and also those of MAS), Firefly is also likely to add new destinations like Macau, Jogjakarta, Haadyai, Bandung and Chiangmai, which are not served by MAS at present.

 

In addition, Firefly may ply routes where MAS is facing intense competition from low-cost carriers.

 

These include routes like Kuala Lumpur-Medan, Penang-Medan, Kuala Lumpur-Singapore and Penang-Singapore.

 

"As a new airline operating out of KLIA, Firefly will be entitled to many incentives from MAHB and this could result in lower operating costs which could then be transferred to even lower fares," the source said.

 

Firefly currently has a staff headcount of 350. If the plan to use the jets in addition to the turbo-props materialises, the airline is set to boast a headcount of 1,500 in four years.

[fenandri 3]

Firefly may take MAS jets to expand (from NST)

 

MALAYSIA Airlines (MAS) (3786) is evaluating the potential of allowing wholly-owned FlyFirefly Sdn Bhd to operate its B737-400 planes when it replaces its fleet gradually from the end of this year.

 

The national carrier will receive three of its B737-800 this year and the next. It will also receive five A330-300 and another five A380 next year.

 

Sources said that Firefly would either lease or buy up to 35 of the used MAS jets, and would use the aircraft for short-range domestic and regional routes.

 

The plan is expected to take off from December this year until the end of 2013 when MAS stops using the B737-400.

Business Times has learnt that Firefly may either operate the Boeings from the KL International Airport (KLIA) or the new Low-Cost Carrier Terminal (LCCT).

 

The airline is believed to have already contacted Malaysia Airports Holdings Bhd (MAHB) about reserving slots for the additional planes at the new LCCT.

 

"It is likely that Firefly will opt for KLIA, which is currently under-utilised, as this will enable the airline's passengers to connect seamlessly on their onward journeys," a source said.

 

Firefly, which was set up by MAS three years ago, currently operates ATR 72-500 turboprops from its hubs in Subang and Penang.

 

Besides using the jets to add capacity and frequencies to the domestic routes it serves (and also those of MAS), Firefly is also likely to add new destinations like Macau, Jogjakarta, Haadyai, Bandung and Chiangmai, which are not served by MAS at present.

 

In addition, Firefly may ply routes where MAS is facing intense competition from low-cost carriers.

 

These include routes like Kuala Lumpur-Medan, Penang-Medan, Kuala Lumpur-Singapore and Penang-Singapore.

 

"As a new airline operating out of KLIA, Firefly will be entitled to many incentives from MAHB and this could result in lower operating costs which could then be transferred to even lower fares," the source said.

 

Firefly currently has a staff headcount of 350. If the plan to use the jets in addition to the turbo-props materialises, the airline is set to boast a headcount of 1,500 in four years.

[Johan Z 0]

Wow, triple posts. Patience is virtue

[KK Lee 5]

Besides using the jets to add capacity and frequencies to the domestic routes it serves (and also those of MAS), Firefly is also likely to add new destinations like Macau, Jogjakarta, Haadyai, Bandung and Chiangmai, which are not served by MAS at present.

 

In addition, Firefly may ply routes where MAS is facing intense competition from low-cost carriers.

 

These include routes like Kuala Lumpur-Medan, Penang-Medan, Kuala Lumpur-Singapore and Penang-Singapore.

 

Instead of complimenting or feeding MH, it seems FY objective is to frustrate AK

 

 

What metal MH have in hand and will soon have is 734 and soon 738,Aquiring Embrear needs a lot of money to be spent to set up such as training cost and spares.If FY has the capital(not tax payers money) that they can very welll purchase that aircraft and become a regional airline.

 

Lee in this case do they then overlap the routes of MH?Doesnt make sense.

 

PMB’s 734 may have zero book value, FY leasing cost may be minimal but still need fuel, crews, etc to operate. By default, secondary airports have low traffic volume, hardly justify 734 on regular frequency.

 

FY may need to pay for regional jet but with regular frequency, yield is normally higher than larger jet.

 

By operating 734, FY routes will overlap with MH involuntary

 

Edited April 25, 2010 by KK Lee

[Mushrif A 3]

But apart from just cheap acquisition costs, what is FY's long term plans & strategy?

 

The 734s will not fly forever, and even now, it is not uncommon to get these 734s going tech.

 

Will FY eventually be getting 738s from MH or from MH's orders and options - which then nullifies the low acquisition costs argument?

Will it operate from both SZB and KUL (LCCT), as I dont see it abandoning SZB?

[Fitri Shukri 0]

Why I fly FY regularly? Not because of its price, but because of SZB, Skypark and brand new ATRs (and nice muffins too).

 

I just love FY as it is now, not as it might be (with old B737-400)

[Ja Singh 2]

Why I fly FY regularly? Not because of its price, but because of SZB, Skypark and brand new ATRs (and nice muffins too).

 

I just love FY as it is now, not as it might be (with old B737-400)

 

You hit the nail on the head with that statement.

 

Finally Mh has done some thing right with FY (aquiring nice turboprops and modern image,SZB ) and now they want to turn it all back wards, If they really need 737's. they should take some 737-800's from MH!

[Mohd. Helmi 0]

Why I fly FY regularly? Not because of its price, but because of SZB, Skypark and brand new ATRs (and nice muffins too).

 

I just love FY as it is now, not as it might be (with old B737-400)

 

Perhaps if they get the 737-400's these might not be based in Malaysia?

 

I found something quite interesting, Firefly Indonesia? . Seems like Firefly is applying for an AOC in Indonesia to start Firefly Indonesia operations, this is if my Bahasa Indonesian is correct.

 

Seems like they're taking a lesson from AK and JQ in expanding regionally. Though, I'm quite skeptical on legacy carriers trying out the LCC business. I believe they should just focus their attention and resources on their mainline operations, mainline carriers trying their hands at LCC's can end badly, Delta's Song comes to mind. However, that said, if the operations were left truly alone and independent, mainline LCC subsidiaries can thrive, examples that come to mind Transavia, Jetstar, Bmibaby, but this is where it is important, they need to have independence in operations, making business decisions and not ones forced on it by big brother. Examples of managerial independence, look at Jetstar and BMIBaby, QF didn't shove JQ with leftovers of their retired ageing Boeing fleet, JQ went with all new Airbus A320's, whilst QF went with new 737's. Similarly look at BMI, it'a LCC BMIBaby operates 737's, whilst it's mainline BMI operates A320's. It is a business decision, and it should always be so. Likewise, FY should be left to make it's own business decisions and not follow some directive from some dato out at MAS or PMB, perhaps not knowing what to do with their retired MAS planes that they bought with tax payer money during the WAU exercise.

[Ja Singh 2]

Perhaps if they get the 737-400's these might not be based in Malaysia?

 

I found something quite interesting, Firefly Indonesia? . Seems like Firefly is applying for an AOC in Indonesia to start Firefly Indonesia operations, this is if my Bahasa Indonesian is correct.

 

Seems like they're taking a lesson from AK and JQ in expanding regionally. Though, I'm quite skeptical on legacy carriers trying out the LCC business. I believe they should just focus their attention and resources on their mainline operations, mainline carriers trying their hands at LCC's can end badly, Delta's Song comes to mind. However, that said, if the operations were left truly alone and independent, mainline LCC subsidiaries can thrive, examples that come to mind Transavia, Jetstar, Bmibaby, but this is where it is important, they need to have independence in operations, making business decisions and not ones forced on it by big brother. Examples of managerial independence, look at Jetstar and BMIBaby, QF didn't shove JQ with leftovers of their retired ageing Boeing fleet, JQ went with all new Airbus A320's, whilst QF went with new 737's. Similarly look at BMI, it'a LCC BMIBaby operates 737's, whilst it's mainline BMI operates A320's. It is a business decision, and it should always be so. Likewise, FY should be left to make it's own business decisions and not follow some directive from some dato out at MAS or PMB, perhaps not knowing what to do with their retired MAS planes that they bought with tax payer money during the WAU exercise.

 

OWN BACKYARD CANNOT TAKE CARE WANT TO GO OVERSEAS? If MH and FY can concentrate within Malaysia (FY, as it is doing right now) and MH KAngaroo route and MAKE PROFIT that will ge good enought. Sadly they lack management expertise to run an airline offshore and this opinion is based on the fact that theu cant even run it right within our own shores. Looks like they want to do everything AK does!

Edited April 27, 2010 by jadivindra

[Mohd Azizul Ramli 2]

So after the radio news that this thing is now off, is it still off or on back?

 

My take on the issue:

• Any growth by a Malaysian airline is much welcomed.
  
• If MH's grand master plan for FY is for the airline to become something like MI to SQ, then this is actually a very good development.
  
• I think the subsequent news article by Business Times that emphasized on operating these old B734s is much cost effective for FY, is pure lies.
  
• The last news article contained an error. MH has already serving Yogyakarta.
  
• It has been proved again and again that all solid LCC start-ups like AK, TR, JQ, Cebu Pacific etc used new aircrafts (mostly A320s) for better cost management (almost) since the very beginning. So why on earth that FY, an airline that has already operating an entirely new fleet of ATR 72-500 airliners wants to operate a fleet of 20 years old B734s? Wouldn't that harm their cost per unit base? I mean the maintenance and fuel costs must be unimaginably humongous. The only LCC start-ups that I know used old aircrafts are those Indonesian LCCs. Is FY in the same league as them? Heck, even some of them (like Mandala, Batavia and Lion) are all now operating newer aircrafts which promised more savings for them.
  
• I agree that FY should operate MH's new B738s if this plan is going to take off. The new B738s might have a higher leasing fee, but it is being offset with the saving that the airline can achieve in maintenance and fuel costs most notably throughout the leasing period.
  
• Leasing period is usually long, last for several years. Plus this is PMB we are talking about where cincai leasing rate can be arranged with MH and its cronies. MASEU once even asked PMB to waive the leasing cost so that MH can record a profit. Though very 'OMG!!! Are they nuts?' in nature, it happened.
  
• I still remember a tender in a local newspaper to sell MH's old B734s. If I am not mistaken, the aircrafts are being bundled in 7. And I think this tender must have been snatched and awarded to someone influential. And to ensure this man's investment is giving him his expected ROI, this MH-FY plan is to be executed at all cost. Nooooooo!
  
• FY has been regarded as a niche player due to its SZB hub. While maintaining the ATRs at SZB seems like a great idea, operating from 2 hubs (SZB and KUL) will increase FY's operation cost most definitely.
  
• Why would MH want to mess up FY's good financial records (having in mind that this airline has lower operating cost than MH's)? Why doesn't MH let FY blossoms into something like AK (cost wise)? It seems to me that MH is trying to divert some of its cost burden to FY. Sharing is not caring in this case.
  
• Letting FY to operate the jets in SZB would be suicidal. And AK/D7 top honchos and Subang residents will lash-out like a thunder that one has never seen before. And we Malaysians are all victimized i-diots. Billions of our money was used to complete the circle of closing down SZB, built KUL, demolished SZB Terminal 1, redeveloped SZB as 'Skypark', building new permanent LCCT at KUL and in the end, reopening back SZB for jet operation. Going nowhere, back to square one, pi mai pi mai tang tu. Why oh why this is happening to us Malaysians? God forbid.
  

[Mohd Azizul Ramli 2]

One more point to share.

 

With regards to the FY-MH plan for something like MI-SQ, the only way it can work is that no overlap in service. The only overlap route in MI-SQ network is SIN-KUL vv. MI-SQ has a very clear cut. One operates widebodies only, the other operates only narrowbodies. One operates to major high yielding destinations, the other concentrates on leisurely secondary destinations. I can predict that FY-MH thingy will have many overlaps, which is such a pity as it exhibits bad planning since the very beginning (which arising the prospect of speculation no. 8 in my post above). I give you a scenario. PEN. SQ left PEN for good. MI takes over. MH won't left PEN for sure. And FY will continue to serve PEN with the ATRs from SZB and their (planned) old jets from KUL. Overlap happens. A BS excuse like 'Oh we are catering for different market' will be holler over and over again. Another good example is DPS. SQ serves DPS. MI stays away from DPS. MH just increased DPS to 3 daily. Will they surrender DPS to FY? I bet no. Why? 'Because we are catering for different market'.

 

The plan is to copy MI-SQ. Why can't we just COPY everything which has been proven successful? Why there must be exceptions (if it does happen as per my prediction)?

 

The way I see it, overlap will definitely happens. The plan (as per the first news article in the thread starter) is for FY to take over all MH's old B734s and at the same time MH will operate their new B738s. There's no aircraft that will be stored or sold to non Malaysian parties. It's new in, old stays. Not new in, old out. So while the new B738s will continue serving MH's current regional destinations, is there anymore new regional destinations that FY can send these old B734s that MH's new B738s don't fly into? Of course there is. But will it be profitable for FY (and ultimately MH because FY is part of MH) and are they that many? We are talking about 35 new B738s and 37 old B734s here. The new to old ratio is almost the same. If these old B734s are to be deployed to a whole new market, this market in question will be the same in size as MH's current narrowbody jet network. It does not make sense to me, because I think such market in such size is non existence, unless MH surrenders a bulk of its regional destinations to FY, which is impossible as then MH will have many idle new B738s on the ground, not knowing where to deploy them.

Edited April 28, 2010 by Mohd Azizul Ramli

[fenandri 3]

azizul, i think what MH doing is kinda like what SQ and tiger air or thai and nok air doing, i dont really see any advantages for MH to copy SQ-MI doing, why MH have to split into two airlines?

[KK Lee 5]

MH is too proud and would rather reinvent the wheel (e.g. community airline) than to copy SQ/MI business model

 

KUL/BKI, KUL/BKK and KUL/SIN have proven by increasing frequency and lowering fare, overall volume increased. If FY could offer additional frequency and cheaper fare, FY should be supported.

 

Edited April 29, 2010 by KK Lee