Firefly airline plans four new hubs

[flee 5]

SUBANG: Firefly wants to set up at least four new hubs for its jet operations within the next two years, said its managing director Datuk Eddy Leong.

 

This would not include KL International Airport (KLIA) from where it would begin its jet services from Jan 15 next year.

 

The four new hubs the airline is looking to establish would be in Kota Kinabalu (KK), Kuching, Senai and Penang.

 

They should be easy targets to meet as by then we would have 13 aircraft,'' he told StarBiz.

 

He added that the concept of having hubs was not for fun but to improve aircraft timing and rotation, and services to passengers. We need the spread of timing and aircraft positioning and having more hubs allows us to do that.''

 

Firefly is turning into a low cost carrier by the middle of next month in a bid to provide the much-needed competition in the low cost air segment of travel in the country. At the moment AirAsia is the clear leader in the low cost market and the only rival domestically is full service carrier Malaysia Airlines (MAS).

 

It is difficult for a full service carrier to compete with a low cost airline as the cost base for both is different. Firefly is a unit of MAS and the entry of Firefly to the low cost arena will surely change the game for low cost travel in the country.

 

Firefly will use the B737-800 to fly twice daily over the KL-KK and KL-Kuching sectors. Flights will be increased to thrice daily for KL-KK and four times a day for KL-Kuching from Jan 24.

 

The airline would lease six aircraft next year and seven more in 2012 for its operations. The long-term plan is to buy 30 jets, but a decision on the aircraft type has yet to be made even though B737-800 makes business sense given that parent MAS has also ordered 35 of the similar aircraft type, according to Leong.

 

The first of the six lease aircraft for 2011 is due for delivery next week and only with more aircraft can the concept of hubbing be a reality.

 

Setting up hubs in Kota Kinabalu, Kuching and Penang are considered more viable by analysts than in Senai. To analysts, Senai is deemed too close to Changi, which is a thriving airport, and as such it does not make economic sense for Firefly to set up a hub at Senai.

 

But Leong has a contrarian view.

 

It is not so absurd. From a cost perspective, it is cheaper given the exchange rate (compared to Singapore). It is also a friendlier airport. Besides, we have Iskandar which is a big development and you need connectivity there. If you take all that into account, it (Senai) is an opportunity and if you do not do it, then it is an opportunity that goes away,'' Leong said.

 

He added that our strategy is not to compete with Changi, but complement it. More so as Changi, as an airport, is not one of the best in terms of low cost as the cost is high to fly into Changi, and it is also congested, so Senai seems quite well positioned.''

 

Leong said a deal had not been crafted with Senai airport yet as talks were still under way.

 

It is not confirmed as we have not sealed the deal, but are looking at it seriously,'' he said.

 

On when Senai would be added as a hub, Leong said, I would not write off a start in 2011.''

 

On its ATR (turboprop) operations, the airline has a hub in Subang and Penang and it operates seven ATR 72-500 to several destinations. The move into low cost does not affect its ATR operations.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/12/15/business/7622547&sec=business

[Prestley Shim 0]

Finally Kuching will be back in the spotlight again.

[KK Lee 5]

There have been many proposed hubs in Malaysia but few materialized. Until FY can prove it can compete with AK effectively and profitably, it is too early to talk about multiple hubs.

 

[Josh T 0]

I think it's a great idea that they're thinking of using Penang as a hub for jet services. There is so much potential there, given the large population and the tourism. I always found it annoying that flying into/out of Penang from/to a foreign destination could only be done on other airlines and not MH, eg.Bangkok with TG, Hong Kong with CX, Xiamen with Xiamen Airlines, Taipei with CA, etc.!

[Tamizi Hj Tamby 1]

Great to hear that FY is considering KCH as a hub.

[KK Lee 5]

Germany’s GDP, population and pax volume is many times larger than Malaysia, LH has only two hubs. Due to distance, BKI can become a mini hub serving Borneo island and regional. Not sure Malaysia can sustain more than two hubs.

 

How many destinations can FY serve profitably from PEN, JHB and KCH? Believe MH should have efficient hub at KUL for hassle free transit.

[flee 5]

It is very clear that MH has decided that it cannot compete with the AirAsia Group carriers. That is why they have switched to competing with them head on using FY as their vehicle.

 

LCC operations are slightly different compared to legacy carriers. LCCs do need more hubs due to the point-to-point nature of their operations. They need some technical capability spread out on their network so that minor technical problems can be sorted out without having the aircraft heading back to the main hub. LCCs let the market decide - where there is demand, there will be a hub!

[Ikman Ikreza 0]

It's good future for FY setup their new hubs and maybe they should consider to appoint KBR/WMKC as their additional hub for peninsular Malaysia Eastern region if they want expand new routes later such as KBR-SIN, KBR-KCH, KBR-BKI, KBR-HKT, KBR-USM based on current traffic benchmark at KBR/WMKC.

[BC Tam 2]

We first need to work out whether the four 'hubs' proposed are real airline hubs in reality or are they of the 'virtual' variety so much favoured by our politicians these days

 

If really for real, someone somewhere has definitely opened up the war chest and swords are drawn towards the red army - cannot be cheap to come up with a new fleet, four hubs etc, all in one go. And going by the analysts' first response earlier, don't think the market will be rushing in too soon with the necessary finance

Just an opinion

[Ja Singh 2]

There have been many proposed hubs in Malaysia but few materialized. Until FY can prove it can compete with AK effectively and profitably, it is too early to talk about multiple hubs.

 

Agreed 100. The distances between this hubs within pinunsular malaysia is less then 50 minutes and hence does not justify. One additional hub in Kota kinabalu will be all good.

[Yusoff 1]

PEN is now under major renovation to cater more pax. The 8 green gables roof will totally replaced with opened or cracked nettle-nut (as what they said).

That's probably another reason for FY to make it a hub. and probably because there will be an LCCT terminal at PEN.

 

Previously they were here (PEN) and then they chiow (left) and now they want to come back again. sigh...

[dean hizudy 0]

 

That's probably another reason for FY to make it a hub. and probably because there will be an LCCT terminal at PEN.

 

 

 

Hopefully there will be no LCCT in any other airports in malaysia. enough for kul and bki got that 'mistake'. really hate the lcct concept.

[neilson 0]

PEN is now under major renovation to cater more pax. The 8 green gables roof will totally replaced with opened or cracked nettle-nut (as what they said).

That's probably another reason for FY to make it a hub. and probably because there will be an LCCT terminal at PEN.

 

Previously they were here (PEN) and then they chiow (left) and now they want to come back again. sigh...

 

they didn't left PEN

actually FY is seperate with two unit, which is ATR unit and LCC unit.

now they would like to setup an LCC hub in PEN, ATR remain as a secondary hub for FY's ATR unit

[BC Tam 2]

All good and exciting to say four or however many 'habs' all over the nation

Another thing to actually dig up resources to bring those proposals to reality

And yet another thing to be able to keep those hubs (and routes) economically viable

Good luck

[Yusoff 1]

they didn't left PEN

actually FY is seperate with two unit, which is ATR unit and LCC unit.

now they would like to setup an LCC hub in PEN, ATR remain as a secondary hub for FY's ATR unit

What I meant was the 'hub' thingy. When they were first operating, FY made PEN as their hub. Then they decided to make full use of Subang airport and moved everything there.

[Pieter C. 5]

eg.Bangkok with TG, Hong Kong with CX, Xiamen with Xiamen Airlines, Taipei with CA, etc.!

 

You'll be a hero at CA now

 

They wish they would...

 

TPE is served by CI only...

 

(CA=Air China; CI=China Airlines)

[dean hizudy 0]

does xiamen airlines fly to Penang?

[neilson 0]

does xiamen airlines fly to Penang?

 

nope, xiamen airlines did not serve PEN

but China Southern Airlines serve Guangzhou and Xiamen from PEN

[dean hizudy 0]

nope, xiamen airlines did not serve PEN

but China Southern Airlines serve Guangzhou and Xiamen from PEN

thanks!

[Yusoff 1]

nope, xiamen airlines did not serve PEN

but China Southern Airlines serve Guangzhou and Xiamen from PEN

Arrives daily after 8pm and departs roughly 12 hours later. Uses A319. cute!

[Sanjay Thaker 0]

OT : AK has quietly cancelled PEN-MAA vv route

[flee 5]

OT : AK has quietly cancelled PEN-MAA vv route

Slightly - cos it is about whether hubs like PEN can have sufficient traffic to justify hub status! LCCs tend to cancel routes if they under-perform or are unprofitable. So it will be a challenge for FY to set up a hub in PEN as AK is already struggling.

[Yusoff 1]

OT : AK has quietly cancelled PEN-MAA vv route

Sad to hear that. Will stop somewhere mid-Jan.