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Lion Air and NADI announced a JV - Malindo Air

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Talked to a friend that just came back Australia from Malaysia. He is a Sarawakian. Asked him if he had tried out Malindo. He said his father in Sarawak advised him not to take Malindo even though the fare was cheaper as Malindo is owned by "Indonesian Lion" and it is not safe. Their 1st and only choice is always AK

Never thought I would say this, but I trust AK more. At least scheduling wise. No nasty cancellations if they don't have the desirable load factor, coz their load is always good domestically

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AK has achieved a size that has allowed them to operate economically and like a proper scheduled airline. If Malindo survives and increases its fleet and operational capabilities, it will also be similar to AK.

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Rusdi: Myanmar is next market

 

In the last three months since Malindo Air’s launch in March, Indonesian tycoonRusdi Kirana has not been to the Kuala Lumpur office, simply because operations had taken off the way he had planned it.

And seven months into its launch, Malindo has flown over half-a-million passengers. It now plies 17 routes and has a dozen more routes in mind and will have 20 aircraft by the end of its second year. At present, it has nine aircraft and operates out of two hubs, the KL International Airport (KLIA) and Subang SkyPark.

Rusdi’s PT Lion Grup owns a 49% equity stake in Malindo, with the rest held by Nadi Sdn Bhd. He was in Kuala Lumpur last week to attend a test flight on Runway 3 of KLIA2. Later, he met StarBizWeek at Malindo’s office in Ara Damansara, where he says, “If there is a problem, I will be here more often, but I don’t have to because Malindo has taken off and its growth is within our expectations.”

Once initial expectations have been met, future aspirations tend to grow. With that, Rusdi says moving forward, Malindo has to grow faster and bigger.

Malindo began operations by plying the KLIA-to-Kota Kinabalu and KLIA-to-Kuching routes, using two brand new B737-900ER aircraft. In August, it started its second hub, flying the ATR out of Subang to destinations within Peninsular Malaysia. Of its nine aircraft, six are jets and three ATRs. Its 17 routes include three international routes - Dhaka in Bangladesh, Jakarta and Bali.

The airline’s next market is India, with flights to Mumbai, New Delhi and Kochi initially planned, but it is waiting for the necessary approvals. Flying to Chennai would come later. If it can achieve that this year, it would be a big feat, something which chief executive officer Chandran Rama Muthy is counting on.

“We did not expect our flights to Dhaka to be so popular. That was a pleasant surprise, and we are now looking at adding Chittagong on our route map,” he says.

After India, the next market Malindo is targeting is China. The airline is hoping to materialise that some time next year.

China is a big market and Kuala Lumpur will be the hub for Indonesians flying there. Malindo is looking at several cities for flights into China, but for now, both Rusdi and Chandran are keeping mum on the destinations.

Once China is in the fold, the airline will be much bigger than what it is now. Rusdi expects Malindo to be 150% bigger in 18 months’ time.

“I think it is not surprising for Malindo to meet expectations for now because it has a lot of support from us (at Lion Grup) in terms of aircraft, human resources, experience and expertise,” says Rusdi.

While Malindo’s growth has surprised many, it is normal to Rusdi, given this support and a market that is demanding for such services. The low-cost theme is not new in Malaysia, as AirAsia has given travellers the first bite into this segment.

“It is different from the time I started Lion Air. We had little money, one aircraft and things were not like what they are now. This is why it has grown and I have told Chandran that Malindo has to grow bigger and faster,” Rusdi adds.

For that, Rusdi says Malindo needs to open more routes and “we have to improve on our marketing”. “They have (sorted) things in the first year, set the basic foundation, operations and maintenance services, and offer good service. Now, we really need to grow in scale and become bigger, and I have given them the next one year to grow,” he adds.

But is there a big enough market for Malindo to tap into to be of that size?

“Today’s growth is within expectations even though competition is tough. But we needed to make a difference when we entered the market and as a result both yields and fares are down,” says Rusdi.

Since Malindo’s entry, some airlines have been dumping fares to get passengers and a report said that as of August, Malindo had managed to secure a 7% share of capacity in the Malaysian domestic market, with both Malaysia Airlines and AirAsiaresponding by increasing capacity to fight the competition.

Malindo’s target is to carry one million passengers by March 2014, and if the Indian routes are added, this is possible, says Chandran.

Adds Rusdi, “By the end of its second year of operations, Malindo would have flown 2.5 million passengers.”

By then, he expects Malindo to break even, although he remains optimistic that it could happen even earlier.

“I am optimistic it will happen in 1.5 years’ time.”

What’s next?

And while Rusdi has high expectations for Malindo, he has also mapped out a growth strategy for his entire airline group.

He and his brother Kusnan Kirana started Lion Air over a decade ago with one aircraft. Today, the group has over 100 aircraft. The company, PT Lion Grup, has ordered 700 new aircraft to become a regional player, competing with the likes ofAirAsia, Jetstar and even the full-service carriers (FSCs).

Unlike his rivals who started expanding much earlier, Kuala Lumpur is his first hub out of Indonesia via Malindo. Kuala Lumpur, as a matter of fact, will be Lion Grup’s gateway to the world.

But recently, Rusdi’s Lion Grup ventured into Thailand by setting up Thai Lion Air with some non-airline investors. The airline is expected to take off by year-end.

Although Rusdi declines to discuss how big his airline group is aiming to be, he is pretty ambitious. Part of that big game plan is to see the Lion name being hubbed at many points in Asean and Asia as a whole. And to build that base, he is looking the way of partnerships.

“We try to be humble,” Rusdi says.

The move into Thailand surprised many, as it has many players. Can Thai Lion Air make it when many others have failed then?

“Thailand has many players but offers a big tourism potential. And with the Asean Open Skies Policy to be implemented, it is good to have a hub in Thailand. Our first flight will leave Bangkok for Kuala Lumpur and this will give the Indonesians and Bangladeshis that we are now carrying on Malindo a new place to go,” says Rusdi.

For starters, Thai Lion Air, which will have two aircraft, has gotten the nod from the Thai authorities to fly both domestic and international routes.

If he can pull Thai Lion Air off, then he would have launched three airlines this year, the other two being Malindo and Batik Air, an FSC operating domestic routes in Indonesia.

“Batik Air is seeing good growth, as although it is an FSC, its fare pricing is 40% lower than other FSCs,” Rusdi explains, adding that “the Lion Air group now carries 100,000 passengers daily and the numbers are just growing”.

Lion Air controls nearly 50% of the domestic air market in Indonesia.

“Although we have Batik Air and Lion Air, Malindo will still offer international connectivity for the group,” he says.

Batik Air was originally planned to be a long-haul airline operating international routes, but has moved on to become an FSC since that plan was shelved.

Apart from Lion Air, Batik Air, Malindo and Thai Lion Air, the airline has two more airlines within its group, namely, Wings Air and Lion Business Jet services. Wings Air offers rural air services in Indonesia, while Lion Business Jet services, which it started two years ago, offers executive jet services.

“With Thai Lion Air, we will have five airlines. We are targeting one more next year,” Rusdi discloses. His target market? Myanmar, although Vietnam is also on his radar screen.

“After three (launches in a year), we need to consolidate, although we will focus on (setting a new partnership) next year,” Rusdi adds.

“Our sixth airline will be launched next year and Myanmar could be next,” he reveals.

Cost-wise, Rusdi says the airline has built a large enough infrastructure to support growth, and that even in an economic slowdown, its unit cost will remain low.

On an Asean scale, he expects consolidation, as he feels there are too many airlines, with no expectations for new entrants into the market either.

“What we will see is bigger airlines but fewer number of players,” he says

http://www.thestar.com.my/Business/Business-News/2013/10/19/Rusdi-Myanmar-is-next-market-He-wants-Malindo-to-grow-150-in-18-months.aspx

Edited by Ridwan Syah

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It could be worse. The hackers just being cheeky.

 

They are ... latest tweet:

 

Malindo Air @Malindo_Air 16m

Dear all, in view of the recent events, Malindo Air is giving away 100,000 free seats from today till end of the week.

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In The Malay Mail Online.

 

Malindo Air says Twitter account hacked

 

KUALA LUMPUR, Oct 21 — Malaysian hybrid airline Malindo Air confirmed today that its Twitter account had been hacked after several insulting tweets were issued from its @Malindo_Air profile this morning.

Among the tweets issued from the budget carrier’s micro-blogging platform to a Twitter user were “not our job to force feed you with information, news of our web check in has been on the web and media, tak nampak ke? (Dont you see it?)”, and to another Twitter user, “I think I would trust you better with cakes than computers”.

“The management has been alerted. If there’s anything, they’ll update in the Facebook and Twitter account,” a Malindo Air representative told the Malay Mail Online today, confirming the hack.

Malindo Air, which is a joint venture between Indonesian airline Lion Air and Malaysia’s National Aerospace and Defence Industries, apologised for the hack on Twitter.

“Malindo Air apologise (sic) for any inconvenience caused. We are in the midst of rectifying the root of the situation. Thank you,” Malindo Air tweeted.

“Dear All, our twitter account has been hacked. Please do not entertain the hacker. We will get to the bottom of this problem. Thank you,” added the airline, which is based in Kuala Lumpur.

The apology was also carried on the budget airline’s Facebook page.

The offending tweets have since been deleted.

According to Indonesian English-language newspaper Jakarta Globe, Malindo Air launched its first route last March, between Kuala Lumpur and Kota Kinabalu.

National news agency Bernama also reported Malindo Air CEO Chandran Rama Muthy as saying last August that the budget airline was in the final stages of getting approval from India to operate flights to various destinations in the country, such as New Delhi, Mumbai and Kochi.

AirAsia X, another local budget airline, axed their New Delhi and Mumbai routes last year due to high operating costs.

 

Source : http://www.themalaymailonline.com/malaysia/article/malindo-air-says-twitter-account-hacked

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Could it be that instead of hackers we're dealing with a disgruntled employee?

 

Could well be ... 'hacker' is a fave catch-all term whenever there is a screw-up. :D

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transit at KUL with single itinerary maybe? :pardon:

 

That can be done for all cities as I mentioned earlier that OD has started offering interconnecting flights.

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Just flew KUL/DPS/KUL with them and both sectors delayed between 50 mins to 1 hour. While the product was excellent, I too would might choose not fly with them because of their cancellations. Would only fly if I time and travel is flexible.

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Not sure it is true, don't put any word in my word. The bed is not as rosy as it seems. The CEO kept stating that OD is stable however the truth is otherwise. They are making losses in almost every single route they are flying. The fare is just too low to cope with the operating cost. Of course, as the CEO he has to put up a brave face.

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I feel like OD is trying to position themselves as a full service carrier, but at low cost to compete with both MH and AK. At least AK is LCC and they make themselves clear.

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Perhaps OD could consider adding B738 type besides than B739ER and ATR 72? The fleet looks insufficient from my view.

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Perhaps OD could consider adding B738 type besides than B739ER and ATR 72? The fleet looks insufficient from my view.

Why do they want a B738 for?

 

They have nice business class seats with good pitch. The extra space that the B739 gives will enable better economics (CASK) than a B738 would.

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Just flew KUL/DPS/KUL with them and both sectors delayed between 50 mins to 1 hour. While the product was excellent, I too would might choose not fly with them because of their cancellations. Would only fly if I time and travel is flexible.

 

Concurred with you, although their fare is attractive, because of uncertainty, have booked on alternative.

 

Believe OD have over stretched, with the exception of ex-SZB ATR operation, doubt their 739 operation is profitable or cash positive.

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We should not be too harsh with OD - this happened with AK too, in their early days. When the aircraft fleet is small, delays and cancellations are inevitable. How OD overcomes the small fleet problems and provide a more reliable service will determine if the survive or perish.

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