Firefly celebrates fifth year with expansion plans and more planes and revival of jet operation

[Johan Z 0]

I know this is probably not feasible. But I really like to see FY to operate smaller jets like Bombardier or Embraer to serve small airports, when 737-800 is too big.

[flee 5]

I know this is probably not feasible. But I really like to see FY to operate smaller jets like Bombardier or Embraer to serve small airports, when 737-800 is too big.

FY's routes are currently very well and profitably served using ATR-72s. Using jets may not be economic. Currently, FY fares are nowhere near the LCC territory. It is just a tad lower than the MAS jet fares. That makes it profitable, even if load factors are not good on a few flights. Using jets for the short routes that FY operate may not give such good yields, especially in times of high fuel prices.

[Mike P 0]

Another flipflop? first wanna kill all the jet operated by FY and now seems to return to them? bear in mind MH can do the charter.. but it was given to FY... may be head to head competition with 3K.

[BC Tam 2]

..... bear in mind MH can do the charter.. but it was given to FY...

If really MH is facilitating this FY charter whilst MAS Charter sits idly by, one can only but imagine the thoughts running through Captain Nik's mind

[V Wong 0]

If really MH is facilitating this FY charter whilst MAS Charter sits idly by, one can only but imagine the thoughts running through Captain Nik's mind

 

Capt Nik probably probably has heard much more astounding and absurd news to be surprised anymore...

Edited April 16, 2012 by V Wong

[flee 5]

Firefly Begins Twice-weekly Charter Flights To Nanning

 

KUALA LUMPUR, April 20 (Bernama) -- Community airline, Firefly, commenced its inaugural twice-weekly charter flight to Nanning in south China yesterday.

 

The direct flight from Kuala Lumpur to Nanning is on every Sunday and from Kuala Lumpur to Nanning via Penang on every Thursday.

 

Firefly said the flights are a collaboration between Firefly and Guangxi China International Travel Service to utilise Firefly's B737-400 aircraft, with a 162-seat passenger capacity.

 

Firefly Chief Executive Officer Ignatius Ong said Nanning was its first foray into China and currently Firefly was the only airline to provide a direct link between Malaysia and Nanning.

 

"We see demand for both leisure and business travel and we are also exploring the possibilities of flying to more cities in China using our B737 aircraft," he added.

[Zamir 0]

Firefly 737-400 is flying again

[Mohd Suhaimi Fariz 2]

Firefly 737-400 is flying again

 

I guess getting out of the lease will be more costly - might as well use it & get some money in return rather than leaving it on the ground.

[flee 5]

Leasing the B734 from a third party lessor was one of the silliest things to do since PMB/MH has plenty of these aircraft that can easily be transferred to FY.

 

FY's mixed jet fleet of B738/B734 is another mistake - it adds complexity to the airline's operations and does not help in offering economies of scale.

 

Thank goodness they are now focussed on ATR-72 ops now.

 

Lets hope that if they acquire more aircraft, they don't go and buy something totally different unless they intend to replace the ATR-72 fleet!

[Radzi 2]

Leasing the B734 from a third party lessor was one of the silliest things to do since PMB/MH has plenty of these aircraft that can easily be transferred to FY.

 

 

Back then MH don't have enough B734 to give away to FY. Of course things has changed considerably since.

[Timothy 1]

Back then MH don't have enough B734 to give away to FY. Of course things has changed considerably since.

 

However the recent availability of B734 certainly didn't come by surprise to certain individuals. A businessman would plan at least 5-10 years down the road. Anything less and he would have (sorry to say) a disaster such as MH.

[Walter Sim 1]

I saw a white 734 with a orange tail in KUL, but could not work out whether it was firefly!

[flee 5]

A somewhat confusing report that states the China flights are out of SZB - not sure if this is really accurate:

http://thestar.com.my/metro/story.asp?file=/2012/4/24/central/11159100&sec=central

[Mohd Suhaimi Fariz 2]

A somewhat confusing report that states the China flights are out of SZB - not sure if this is really accurate:

http://thestar.com.m...100&sec=central

 

Yes, the terminal in the picture is Skypark...

 

Typical Malaysian media.

[Radzi 2]

I saw a white 734 with a orange tail in KUL, but could not work out whether it was firefly!

 

FZB is parked at the open bay near the B-wing of MTB. White colored, no title but with FY tail.

[flee 5]

Malaysian low-cost carrier AirAsia has reported another highly profitable quarter, including the highest operating margin among publicly traded Asian airlines (both LCCs and full service carriers) while restructuring flag carrier Malaysia Airlines (MAS) remains one of Asia’s most unprofitable carriers. The outlook for AirAsia Malaysia is bright, particularly if MAS fails to adjust its strategy following the unbundling earlier this month of the equity swap with AirAsia. The MAS outlook remains bleak as the group continues to push on with its new business plan, which focuses entirely on the challenging premium market just as nearly every other major airline group in Asia is investing significantly in the budget sector.

 

AirAsia Malaysia is the only publicly traded LCC in Southeast Asia to record an improvement in profitability for 1Q2012. The carrier reported a pre-tax net profit of MYR212 million (USD67 million), an improvement of 5%, while its after tax net profit improved by less than 1% to MYR172 million (USD54 million). Revenues at AirAsia Malaysia increased by 11% to MYR1.17 billion (USD371 million) as passenger traffic and seat capacity both increased by 12% to 4.8 million and 6.1 million, respectively.

 

While the improvement in profits was very small, due primarily to a 9% increase in average fuel price, all the other publicly traded LCCs in the region have recorded significant decreases in net profitability including Cebu Pacific, Nok Air, Tiger Airways Singapore, Thai AirAsia and Indonesia AirAsia. Cebu, Nok and Thai AirAsia remained profitable while Indonesia AirAsia and Tiger Airways Singapore were in the red for the quarter ending 31-Mar-2012.

 

Thai AirAsia saw its net profit after tax drop by 23% in 1Q2012 to THB622 million (USD20 million) as revenues increased by 18% to THB4.868 billion (USD154 million) and passenger traffic grew by 17% to 2.1 million. Indonesia AirAsia recorded a net loss of IDR36.6 billion (USD4 million), compared to a net profit of IDR31.9 billion (USD3 million) in 1Q2011, as revenues increased by 17% to IDR911.3 billion (USD98 million) and passenger traffic grew 16% to 1.3 million (see Background information). The Malaysia-listed AirAsia Group now reports results for its Malaysian unit (AirAsia Malaysia) separately from its affiliates in Thailand and Indonesia as the two affiliates are now in the process of having their own initial public offerings.

 

Meaningful collaboration between AirAsia and MAS seems unlikely

 

While MAS is still on course to join oneworld later this year and still plans to pursue collaboration with AirAsia, the level of cooperation between the two former rivals will likely be limited. Most significantly, the two carriers are no longer expected to pursue any network tie-ups. (From a network perspective, MAS has benefited from AirAsia X’s withdrawal from Europe and India, although the routes were not profitable for AirAsia X. AirAsia X also gained access to Sydney and Beijing, which the Malaysian Government had approved but not given a final sign off for, and that process may have been accelerated by the equity swap.)

 

Joint purchasing and partnerships in the areas of maintenance and training are still possible although certainly not guaranteed, particularly given AirAsia’s track record of abandoning planned partnerships with rivals. (AirAsia unveiled in Jan-2010 a cooperation plan with Jetstar that envisioned joint purchasing, including aircraft, but in recent months AirAsia has acknowledged the two leading LCC groups no longer have any plans to cooperate; questions linger if there was ever genuine intent or if the move was a distraction during rival Tiger Airways' quiet period for its IPO. With AirAsia and Jetsar, there were bigger potential benefits for joint purchasing compared to possible AirAsia-MAS cooperation as AirAsia and Jetstar both operate A320s while MAS’ narrowbody fleet consists of 737s. MAS could potentially maintain AirAsia’s A320 fleet, but this would require its engineering division to invest in adding A320 overhaul capabilities and would ultimately be contingent on MAS offering a highly competitive price to AirAsia. As for training, AirAsia already has a joint venture with CAE.)

 

The prospect of feed from AirAsia represented the biggest potential benefit for MAS as AirAsia has a more extensive network within ASEAN. Without this feed, MAS should start to question whether the benefits of the collaboration with AirAsia are now worth more than the potential benefits of following nearly all its Asian peers in having its own LCC subsidiary or unit. The equity swap with AirAsia indirectly gave MAS a budget brand in AirAsia (MAS parent Khazanah Nasional held a 10% stake in AirAsia while AirAsia’s largest shareholder Tune Air had a 20.5% stake in MAS from Aug-2011 to early May-2012, when the swap was reversed).

 

MAS had previously recognised the benefit of a second brand for the fast-growing budget end of the market by deciding to use its Firefly subsidiary on trunk routes. After taking delivery of the first of what was intended to be at least 24 Boeing 737s, Firefly started to compete head to head with AirAsia in Jan-2011, giving AirAsia LCC competition in the Malaysian domestic market for the first time. But after the equity swap with AirAsia was forged in Aug-2011, MAS quickly began the process of shutting down the Firefly-branded 737 LCC operation. This decision has left MAS as the only major flag carrier in Southeast Asia without a budget brand. Garuda Indonesia, Singapore Airlines, Thai Airways, Philippine Airlines and Vietnam Airlines all now have at least one fully or partially owned budget carrier unit or subsidiary.

 

Pressure could build for MAS to restore Firefly-branded LCC operation

 

So far MAS management has said it has no intentions to restore the Firefly-branded 737 LCC operation. But some parties are pushing for MAS to revisit its current strategy of only focussing on the full service end of the market. Malaysia Airports is confident MAS will again pursue the now common Asian full service carrier strategy of using a second brand for the budget market. Malaysia Airports managing director and former MAS executive Tan Sri Bashir Ahmad Abdul Majid tells CAPA that if Firefly does not resume 737 services another Asian LCC group such as Lion Air may end up entering the Malaysian domestic market.

 

Lion, which operates about 60 737-900ERs in Indonesia and is committed to expanding its 737 fleet to at least 400 aircraft, looked last year at establishing a joint venture LCC in Malaysia with local regional carrier Berjaya Air. Lion and Berjaya ended up breaking off talks without finalising a deal but Malaysia’s domestic market remains potentially appealing to new LCCs, as evident by AirAsia's high operating margin. Mr Abdul Majib points out that fares on domestic trunk routes that Firefly operated with 737s before the carrier’s 737 fleet was transferred to MAS mainline have increased.

 

AirAsia Malaysia recorded a 7% year-over-year increase in average fare in 1Q2012 to MYR177 (USD56). It is doubtful, however, that the discontinuation of Firefly’s 737 operation was completely responsible for the fare increase as Firefly only competed with AirAsia on a few routes in 1Q2011. But if Firefly had followed through on its expansion plans, it would have begun to compete with AirAsia on almost all major domestic routes in Malaysia, inevitably putting pressure on fares as well as AirAsia Malaysia’s yields and industry-leading profitability.

 

Firefly’s 737 operation incurred losses in the first three quarters of 2011 but the operation was not expected to be profitable in its first year (MAS initially projected breakeven results from early 2012). Mr Abdul Majib believes the operation would have proven to be profitable once it reached a larger size and says the strategy was to pursue market share rather than profitability in the first phase.

 

MAS has resumed services on Kuala Lumpur routes originally handed to Firefly, such as Sibu, and has slightly increased capacity (while not absorbing all of the capacity previously provided with Firefly 737s) on routes it was operating alongside Firefly, such as Kuala Lumpur-Kota Kinabalu. Average fares on the ex-Firefly routes have increased as MAS is a premium brand while the overall reduction in LCC capacity gives AirAsia a potential opportunity to raise its average fares.

 

For full analysis: http://www.centrefor...g-profits-74652

Edited May 25, 2012 by flee

[KK Lee 5]

Pressure could build for MAS to restore Firefly-branded LCC operation

 

 

Square peg in a round hole

[Mohd Suhaimi Fariz 2]

If MAS should even want to consider returning to the LCC model - they should differentiate it by being a class above AirAsia, like Virgin America or jetBlue.

 

SQ missed that opportunity when they launched Scoot as a me-too answer to AirAsia X.

[nrazmoor 0]

I dont think they should jump in immediately... Get MH in order or make it profitable first. They dont have enough capital or planes to start a LCC. The new planes 738 coming in shld be given a priority to MH rather than to a new LCC. Maybe they can start thinking about it after 1 or 2 yr.

[flee 5]

I dont think they should jump in immediately... Get MH in order or make it profitable first. They dont have enough capital or planes to start a LCC. The new planes 738 coming in shld be given a priority to MH rather than to a new LCC. Maybe they can start thinking about it after 1 or 2 yr.

Agree with you on that - MAS needs to focus on solving its problem. A new LCC would not be on good foundations if the mess is still waiting to be cleaned up.

 

It may be a good idea to have a premium LCC - this is where they can have a JV with AirAsia. AirAsia, being very good at cost management can provide the aircraft and flight crew. MAS can give services a premium look and feel via its cabin product as well as marketing through its existing network of sales offices.

 

AirAsia has a 49% stake (but only 33% voting rights) in the JV with ANA in Japan. It should not be a problem for them to have a JV with MAS, if politics and politicians do not interfere with business decisions.

[Phil M. 0]

Tony F's Virgin fascination

 

What u guys think?

[Radzi 2]

http://www.flightglobal.com/blogs/airline-business/2012/05/airasia-premier-dishes-out-the.html

 

"Pilots are paid too much. All they do is taxi to the runway, take off, switch on autopilot and then bitch about the company for the next two hours."

 

Really?

[Naim 6]

Must be something he has been smoking!

[Ahmad M 1]

It was just a joke, shouldn't read too much into it.

[Naim 6]

Ppl would start quoting just this line out of context, and the joke factor would be forgotten. I've seen ppl writing:

 

"Pilots are paid too much. All they do is taxi to the runway, take off, switch on autopilot and then bitch about the company for the next two hours." - Tony Fernandes

Edited May 26, 2012 by Naim