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Firefly may take MAS jets to expand

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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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http://biz.thestar.com.my/news/story.asp?file=/2010/11/4/business/7360115&sec=business

 

PETALING JAYA: Firefly, which now operates turboprops from Subang, will begin flying jets on several domestic routes from the KL International Airport (KLIA) as early as January or February.

 

The idea is to beat competition with a low-cost model rather than a full service one and Firefly will take over some of the B737-400 aircraft from parent Malaysia Airlines (MAS) to ply the domestic routes.

 

“It will have four to six B737-400 aircraft to begin with and more will be added to the system over time. Firefly is likely to do more of the cross-over flights to Sabah and Sarawak,’’ said a source.

 

Firefly is slated to make an announcement on its expansion plans on Monday.

 

It could not be confirmed if the jets will take off from KLIA or the Low-Cost Carrier Terminal in Sepang but, given the need to connect passengers from domestic to international routes, it would it easier to fly out of KLIA.

 

Certainly the jets would not fly from Subang, a source said.

 

He added that Firefly was also to fly to Asean destinations using the jets but the airline had to first get the necessary approvals from the authorities.

 

Firefly’s operations in Subang would continue as usual. The airline currently operates seven ATR 75-200s for domestic routes, Singapore, Thailand and Indonesia. It will take delivery of two ATRs by the year-end and a third by January.

 

Firefly is able to take over some of the B737-400 aircraft from MAS as the latter has ordered 55 new B737-800. On Monday, MAS took delivery of the first such aircraft,which came with a roomier interior, higher ceiling and mood lighting.

 

Even the economy class is fitted with personal screens for in-flight entertainment and the aircraft can fly 5½ hours non-stop. The new interior done by Boeing is part of a package of improvements to the 737 family, which include a 2% fuel burn improvement and the updated CFM56-7BE engine, thus bringing down maintenance cost for the airline.

 

Meanwhile, MAS is to take delivery of two B737-400 before the year is out. The national carrier will use the first aircraft, which is a 160-seater, for the KL-Kota Kinabalu-Haneda route to be launched on Nov 15.

 

The aircraft is powered by engines from Pratt & Whitney. On Tuesday, US Secretary of State Hillary Rodham Clinton witnessed the signing of a sale and purchase agreement for the purchase of 50 engines by MAS from Pratt & Whitney.

 

Yesterday, at Sultan Abdul Aziz Shah Airport in Subang, where MAS showcased its new B737-800, Clinton said the “partnership between MAS and Boeing, Pratt & Whitney and General Electric is a win-win relationship which would create high paying skill jobs in both countries.’’

 

Also present at the event was Transport Minister Datuk Seri Kong Cho Ha and MAS senior team. Besides the 737-800, the airline has ordered 25 A330-300 and six A380.

 

Just some news from the Malaysian "aviation reporter". One minor typo should read as 737-800 and not 737-400.

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Another error is that engines are from CFM, the sole supplier for B737-800s...

 

The reporter omitted to say that the Pratt engines are meant for the A330-300s that will arrive next year.

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Firefly may take MLA and MLB for a start. December.Leased to MH from ILFC. MH to sublease to FY.

Makes sense for MH to pass these ex-XL planes to FY. Their configurations are more suited for LCC operations.

 

It is also better for FY not to operate the old B734s as they cost too much to run for an LCC operation!

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Next AK sale begins on 9 Nov. But the cheapest tickets will probably be for travel in Nov 2011 to Jan 2012.

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Makes sense for MH to pass these ex-XL planes to FY. Their configurations are more suited for LCC operations.

 

It is also better for FY not to operate the old B734s as they cost too much to run for an LCC operation!

will be great to see MLA and MLB in firefly livery. And also the E 170 ideas seems good.

Edited by jadivindra

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The problem with Embraer jets is FY probably have to wait 3-4 (or maybe more) years before getting their first jet if order is placed around this time. Leasing 737s sounds more economical to me, considering MH also operate the same type.

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Leasing 737s sounds more economical to me, considering MH also operate the same type.

Yes, the B734 lease rates will be probably much lower than having to pay for new aircraft. Fuel consumption penalties will be partially offset by the lower cost of the aircraft lease.

 

From today's Star: http://biz.thestar.com.my/news/story.asp?file=/2010/11/8/business/7381778&sec=business

 

Firefly to add more domestic destinations

 

PETALING JAYA: Malaysia Airlines (MAS) has finally turned to wholly-owned unit Firefly to compete head-on with low-cost carrier (LCC) AirAsia as Firefly looks to add more domestic destinations now and Asean routes eventually.

 

As the global airline industry recovers, full-service carriers (FSC) in Asia are swiftly looking at ways to enter the low-fare segment and regain lost market share as more travellers opt to fly with LCCs.

 

While MAS plans to expand aggressively into Asia with its new fleet, it will not want to lose out on the short-haul market given that 78% of the 24 million tourist arrivals in Malaysia last year came from this market (more so neighbouring markets), 15% from medium-haul markets and 7% from long-haul markets. Firefly’s expansion can help address this concern.

 

StarBiz reported last week that Firefly, which operates turboprop aircraft from Subang, will start flying jets as early as the first quarter next year from KL International Airport.

 

Citing sources, the report said that Firefly will initially use four to six B737-400s to provide cross-over flights to Sabah and Sarawak and add Asean destinations once it receives the relevant approvals.

 

To facilitate the expansion plan, MAS may continue to lease the B737 aircraft and charge Firefly a fee for the utilisation of these planes.

 

Firefly managing director Datuk Eddy Leong will reveal Firefly’s expansion plan today to the media.

 

HwangDBS Vickers Research viewed the expansion as positive for MAS, given Firefly’s profitable operations and ability now to help partly subsidise the loss-making routes.

 

“The expansion will also help MAS compete with AirAsia, which is estimated to have a bigger market share in Malaysia compared to MAS,” said the research house in a report last Thursday.

 

AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes remains unfazed by the expansion plans.

 

“We are beyond worrying about what legacy airlines do. AirAsia has grown and will continue to grow positively due to a disciplined focus on cost and the short haul single class model,” he told StarBiz.

 

It can be an uphill task for a FSC to operate its own LCC, considering that many LCCs have gone bust or were bought over by LCC rivals. For instance, Easyjet bought over British Airways’ LCC Go for £374mil in 2002 while Europe’s Ryanair purchased KLM Royal Dutch Airline’s loss-making LCC Buzz at £15mil in 2003.

 

Closer to home, Garuda Indonesia is now focused on fixing itself before it looks to mend its LCC Citilink Airlines.

 

There have been exceptions such as Qantas Airways’ successful LCC Jetstar Airways. Meanwhile, Singapore Airlines’ associate Tiger Airways has also done well in the regional LCC space.

 

HwangDBS said its main concern with Firefly’s expansion plan was the higher operating costs of the old B737s, which could affect its bottom line despite Firefly’s low-cost business model.

 

A local aviation analyst said the fuel consumption for the older Boeing aircraft was higher, at an average of 10% to 15% more per seat basis than the newer models.

 

Many of the LCCs like Jetstar, Tiger Airways and AirAsia operate relatively newer A320 planes.

 

Fernandes added that MAS’ decision to move into the LCC space would remove the last hurdle for AirAsia X.

 

“This removes the last blockage for AirAsia X and allows us to build a world class hub. Now MAS has entered our space, the long-haul market should be fully liberalised for AirAsia X,” he said.

 

Fernandes may not be too far off the mark, as the Government has stated its intention under the Economic Transformation Programme to enhance connectivity to priority medium-haul markets.

 

The plan is to increase frequencies to 10 priority cities, which include Beijing, Delhi, Melbourne, Mumbai, Osaka, Seoul, Shanghai, Sydney, Taipei and Tokyo. Malaysia is said to have a double-digit flight frequency gap to most of these cities compared with Singapore and Thailand.

 

The local transport ministry will be working on increasing air rights to the countries that have restricted air rights, primarily Australia, Japan and India. The distribution of subsequent air rights will also be done in a more transparent and liberalised manner, as the transport ministry develops an air rights allocation framework.

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If Firefly plan to play routes within Penisular to Sarawak and Sabah, it's mean probably MASwings have a same plan too? Nice to see B734 in Firefly livery same as B734 in MASwings livery.

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If Firefly plan to play routes within Penisular to Sarawak and Sabah, it's mean probably MASwings have a same plan too? Nice to see B734 in Firefly livery same as B734 in MASwings livery.

 

01-intro.jpg

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If Firefly plan to play routes within Penisular to Sarawak and Sabah, it's mean probably MASwings have a same plan too? Nice to see B734 in Firefly livery same as B734 in MASwings livery.

Well we will have to see what kind of business model MASWings will finally be given. Firefly is now declared a LCC by the holding company. So it is now cleared to fight with LCCs like AirAsia, Tiger, JetStar, etc.

 

MASWings will receive plenty of complaints if it decides to be a LCC as well as it receives lots of subsidies from the Malaysian government.

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Great to see that FY will be using new 738s...and not be seen as a trashbin for MH's has-beens. Also, addresses operating efficiency issues, with 734s on the long term.

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Firefly’s new Boeing 737-800s to fly from KLIA

 

PETALING JAYA, Nov 8 — Low-cost carrier (LCC) Firefly will add 30 Boeing 737-800s to its fleet over the next five years, which will operate from the Kuala Lumpur International Airport (KLIA) main terminal.

“Phase 1 of our plan, spanning 2011 to 2015, involves bringing into service a total of 30 aircraft, which will allow for an aggressive growth rate in our network,” Firefly managing director Datuk Eddy Leong told reporters here.

 

The Malaysia Airlines (MAS) wholly-owned unit will receive the initial six 737-800s next year, the first of which will ply the Kuala Lumpur to Kota Kinabalu and Kuching routes from January 15, 2011 onwards.

 

Firefly will receive seven more jets in 2012, another seven in 2013, five in 2014 and the last five in 2015.

 

It will maintain its existing turboprop fleet of seven ATR 72-500s, which currently operates out of Skypark Subang airport to 19 cities via 24 routes within Malaysia, Thailand, Indonesia and Singapore.

 

The airline also plans to acquire three more such planes in the coming year.

 

Source: http://www.themalaysianinsider.com/business/article/fireflys-new-boeing-737-800s-to-fly-from-klia/

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Hahaha! With FY, you can choose between Standard Service RM30 and Premium RM 60, with different sets of perks like meals, seat selections and baggage allowance, Premiun entails name and date change and priority luggage services...or you could go basic...with NONE of the perks...I belive thats like flying with just 5kg worth of hand luggage...creative!

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I just got myself on their first flight out to BKI on the 15th :yahoo:

 

Hehe, u lucky one. Surely when u arrived at BKI airport got ceremony to celebrate 1st flight to BKI :D. Anyone planning trip to KCH on 15th Jan 1st flight?

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This comes as a surprise to me (the sale of the tickets to BKI and KCH). Congrats to SherM for nailing the ticket on the inaugural flight. Make sure to write a full blown trip report about the journey, ok.

Edited by Mohd Azizul Ramli

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This comes as a surprise to me (the sale of the tickets to BKI and KCH). Congrats to SherM for nailing the ticket on the inaugural flight. Make sure to write a full blown trip report about the journey, ok.

 

Will sure do! (If I'm not too sleepy since the flight's at 0655hrs). I even got the emergency exit row so that I can get a picture of its winglets. From the artist impression, it seems that the FireFly logo will be painted on the inside as well. Apparently, they won't be using the aerobridge despite being in KLIA. I was enquiring regarding disabled passengers and was told that one needs to climb the stairs to board the plane. Anyone can confirm?

Edited by SherM

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Firefly’s new Boeing 737-800s to fly from KLIA

 

PETALING JAYA, Nov 8 — Low-cost carrier (LCC) Firefly will add 30 Boeing 737-800s to its fleet over the next five years, which will operate from the Kuala Lumpur International Airport (KLIA) main terminal.

“Phase 1 of our plan, spanning 2011 to 2015, involves bringing into service a total of 30 aircraft, which will allow for an aggressive growth rate in our network,” Firefly managing director Datuk Eddy Leong told reporters here.

 

The Malaysia Airlines (MAS) wholly-owned unit will receive the initial six 737-800s next year, the first of which will ply the Kuala Lumpur to Kota Kinabalu and Kuching routes from January 15, 2011 onwards.

 

Firefly will receive seven more jets in 2012, another seven in 2013, five in 2014 and the last five in 2015.

 

It will maintain its existing turboprop fleet of seven ATR 72-500s, which currently operates out of Skypark Subang airport to 19 cities via 24 routes within Malaysia, Thailand, Indonesia and Singapore.

 

The airline also plans to acquire three more such planes in the coming year.

 

Source: http://www.themalaysianinsider.com/business/article/fireflys-new-boeing-737-800s-to-fly-from-klia/

I'm assuming all these new B738s will be the leased ones and not the MAS-owned ones? Anyway, great to see FY competing directly with AK as a LCC. Does this also mean that FY will be using the LCCT rather than the main terminal?

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FY updates to its registered members :)

 

 

Dear valued Customer,

 

Now you too can enjoy hassle-free travel between Kuala Lumpur and East Malaysia on Firefly's new fleet of B737-800 aircraft. Operating from Main Terminal Building of award-winning Kuala Lumpur International Airport, our passengers don't have to cross the tarmac under the hot sun or rainy sky to board the plane! Find out how you can enjoy incredible value with Firefly when you visit www.fireflyz.com.my.

 

 

 

Unsubscribe if you do not wish to receive further emails from us.

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