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Lion Air and NADI announced a JV - Malindo Air

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Could be - or they could just be trying to preserve their working capital...

 

Could JV partners didn't pump in as much cash as they should?

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Could JV partners didn't pump in as much cash as they should?

Dunno - we are not privy to any info cos they are a private company. They might decide on a cash burn rate for the first year so as to sustain the lean time when starting up. We will have to wait and see!

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Dunno - we are not privy to any info cos they are a private company. They might decide on a cash burn rate for the first year so as to sustain the lean time when starting up. We will have to wait and see!

 

 

Could JV partners didn't pump in as much cash as they should?

A quote from a pilot friend of mine.

"This is Malaysian company, using Indonesian money, since NADI gave none, they are just rent-seeking, true story."

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Aaahh, rent seeking.

 

For the benefit of the not so well informed on the meening of this, here:

 

"A simple definition of rent seeking is spending resources in order to gain by increasing one's share of existing wealth, instead of trying to create wealth. The net effect of rent-seeking is to reduce total social wealth, because resources are spent and no new wealth is created. In a theoretical context, it is important to distinguish rent-seeking from profit-seeking. Profit-seeking in this sense is the creation of wealth, while rent-seeking is the use of social institutions such as the power of government to redistribute wealth among different groups without creating new wealth. In a practical context, income obtained through rent-seeking may of course contribute to profits in the standard, accounting sense of the word.

Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The origin of the term refers to gaining control of land or other natural resources. An example of rent-seeking in a modern economy is political lobbying for government benefits or subsidies, or to impose regulations on competitors, in order to increase market share". Wikipedia

 

And the plot thickens.

 

Cheers

A.v.S.

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A quote from a pilot friend of mine.

"This is Malaysian company, using Indonesian money, since NADI gave none, they are just rent-seeking, true story."

Or it could be a case of PM Najib's famous quote "you help me, I help you"....

 

Lion could be using Malindo to try to circumvent the EU blacklist, hence plans to deploy the B787s at Malindo. So NADI offered to "help" - but for a fee, of course! ;)

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So NADI offered to "help" - but for a fee, of course! ;)

Free lunches being figment of one's imagination, at best :D

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The main question now, will OD be the Third Force in Malaysian aviation (after MH and AK/D7), or will they be a footnote of history?

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I'm beginning to wonder how well is Malindo doing...

 

This morning, well until noon - all 4 739s are parked at the remote bays fronting the A gates of the MTB, although one was later moved to an A gate for a departure in the afternoon.

 

But to have all 4 739s firmly on the ground in the mornings?!

 

 

Separately, there were 2 Lionair 738s parked at remote bays around the Satellite building. Both gone tech?

 

Could it be crew on strike? Heard that the pilots are not paid accordingly.

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The main question now, will OD be the Third Force in Malaysian aviation (after MH and AK/D7), or will they be a footnote of history?

Time will tell...

 

Some investment bank analysts have given them one year to "disappear" from the Malaysian skies. It would appear that OD did not have a great start so far. We just need to see how it plays out.

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@ flee.

 

Them analysts you refer to, they were from CIMB i presume? :lazy: If not, i like to read about it, you have any link to share with me?

 

I have also asked my analysts from the International Bank of Timbuktu what their take was on Malindo.

They said, " well, if the oil price goes low and the flying public likes them instead of the Red Brigade, and, they do not throw aircraft away and keep their prices very low and can maintain a hundred percent on time departure and their catering is top notch and their IFE is the best in Asia and the Ringgit remains strong against the USD, then yes, their future is bright." You see flee, one sometimes wonders how banks recruit their analysts. In depth knowledge on aviation matters is not required, as it seems.

 

With best regards

A.v.S.

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PETALING JAYA: New low-cost airline Malindo Air has come out in the open to deny any “extraordinary” links with the prime minister and the government in its operations, amid accusations of corruption and cronyism by the DAP.



DAP’s publicity chief Tony Pua said Najib Tun Razak had launched the airline on Sept 12 last year, months before its aviation license was approved on Feb 28.



“This has given us even more concrete evidence that Malindo Air was given extraordinary support from the prime minister himself, to the point that its other flaws were overlooked,” Pua had told reporters earlier this month.



But in rebutting Pua’s arguments, an officer from Malindo Air stressed that there had been no launch of the airline prior to the issuance of an aviation license.



“What Pua says is completely incorrect. The prime minister was guest-of-honour at a signing ceremony on Sept 12, 2012, where Indonesia’s PT Lion Group and Malaysia’s National Defence Industries (Nadi) signed a joint-venture agreement to establish Malindo Air,” public relations and communications officer Raja Sa’adi Raja Amrin told FMT in an interview.



Raja Sa’adi explained that the purpose of the event was to publicise the signing of the joint-venture agreement and to disclose their intention in establishing an airline in Malaysia.



“We could have waited until after the issuance of the operator certificate (AOC)…to announce our intention… But by making the disclosure in September, it meant that the matter was in public domain.



“In other words, news organisations had more than five months to analyse, debate and discuss the merits of Malaysia having a new airline that promises to create more jobs and opportunities for Malaysians.”



He said the airline understood that the launch of Malindo Air itself was still subject to approval and issuance of the AOC by Malaysia’s Department of Civil Aviation (DCA).



Raja Sa’adi also rubbished Pua’s argument that Malindo Air was in an unstable financial position and thus undeserving of the aviation license.



He said that while Pua was accurate in stating the airline’s paid-up capital was only RM1 million, he stressed that they currently had a “very strong financial backing”.



All local, fully trained pilots



He also allayed fears that the pilots of Malindo Air were unprofessional, stressing that all were Malaysians and formerly employed with local airlines such as Malaysian Airlines, Air Asia and Firefly.



“Even though PT Lion Group is an Indonesian company, none of our pilots are from Indonesia. They are all Malaysians and fully trained. They are regulated by Malaysia’s DCA and have nothing to do with PT Lion Group,” he assured.



Pua had previously brought up the issue of a Lion Air airplane crash in Bali in April, and that many of their pilots were arrested for drug use. The Indonesian airline has also been banned in the European Union.



Lion Air is a subsidiary of PT Lion Group, which co-owns Malindo Air.



But Raja Sa’adi stressed yesterday that Lion Air and Malindo Air were two completely independent air lines and managed by separate teams.



“Our management team is made up of experienced individuals formerly with Malaysian Airlines, Air Asia and Firefly,” he said.



He also pointed out that nearly all Indonesian airlines were banned from European air space.



“The reason is not because of the airlines, but rather the European Union has issues with Indonesia’s Directorate General of Civil Aviation (DCGA) with regards to the DGCA’s ability to provide proper regulatory oversight.”



http://www.freemalaysiatoday.com/category/nation/2013/07/31/malindo-air-tony-pua-got-it-all-wrong/


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@ flee.

 

Them analysts you refer to, they were from CIMB i presume? :lazy: If not, i like to read about it, you have any link to share with me?

 

I have also asked my analysts from the International Bank of Timbuktu what their take was on Malindo.

They said, " well, if the oil price goes low and the flying public likes them instead of the Red Brigade, and, they do not throw aircraft away and keep their prices very low and can maintain a hundred percent on time departure and their catering is top notch and their IFE is the best in Asia and the Ringgit remains strong against the USD, then yes, their future is bright." You see flee, one sometimes wonders how banks recruit their analysts. In depth knowledge on aviation matters is not required, as it seems.

 

With best regards

A.v.S.

Arthur, can't really remember because I have a pretty dim view of them analysts anyway. Always better to do your own homework!

 

I remember reading this before Malindo commenced operations in March - the news report contained comments from several investment banks and some think that Malindo is not 100% committed to the venture. They figured that if losses mounted, they will pull out to cut losses. The time frame they gave was around one year.

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There is a huge Malindo Air billboard at Jalan Lintas/Jalan Bypass Penampang junction at KK which was recently put up. Personally, I think the marketing department (or whatever a division in OD is named for marketing purpose is) should do better marketing to attract pax.

 

The billboard I mentioned just now contains marketing elements which I find rather cheap. Yes, its low cost airline with touches of FSC. But, a touch of more 'photoshop enhancements' probably can do the trick perhaps?

 

This one ? :)

20130731_163609.jpg

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35kg???

Yes, if you look at the check in counters for India/Bangladesh/Pakistan bound flights, you will see pax with lots of cardboard boxes to check in - its like they are moving house! Malindo knows their market well! ;)

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im not sure if they are making the right decision to introduce flights to South Asia rather than concentrating East and South East Asia..they should be guided by all the previous routes which had been axed by MH & AK previously (loss) and which of the routes with added capacities (profit) as their reference..with this they can save themselves from unnecessary trial and error process....

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Yes, if you look at the check in counters for India/Bangladesh/Pakistan bound flights, you will see pax with lots of cardboard boxes to check in - its like they are moving house! Malindo knows their market well! ;)

I've seen countless flat screen TV boxes at KLIA too!

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I've seen countless flat screen TV boxes at KLIA too!

 

Yes I was about to ask how heavy is a 46" LCD/LED TV. :p

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Yes I was about to ask how heavy is a 46" LCD/LED TV. :p

Much lighter than a CRT of comparable size.

 

Anyway all OD flights seems to be operating yesterday.

Edited by Radzi

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