Boeing delivers 7,500th to Malindo Air

KUALA LUMPUR, March 21 — Boeing has delivered the 7,500th 737 to come off the production line to Malaysia-based Malindo Air.

Malindo Air is a joint venture between Jakarta-based Lion Air and Malaysia’s National Aerospace and Defence Industries (NADI).

Malindo Air is using the Next-Generation 737-900ER to launch its low-fares service, Boeing said in a statement today.

Malindo Air’s 737-900ER (Extended Range) with the passenger-pleasing Boeing Sky Interior features new modern sculpted sidewalls and window reveals, LED lighting that enhances the sense of spaciousness and larger pivoting overhead stowage bins.

The Boeing 737 is the best-selling commercial jetliner of all time with total orders exceeding 10,500 airplanes.

Nearly 85 per cent of Boeing’s backlog of more than 3,100 Next-Generation 737s will be delivered with the Boeing Sky Interior, Boeing said. — Bernama

Malindo's fares unlikely to stay low

Malindo's fares unlikely to stay low

Malindo Air, which will commence operation on March 22, 2013, is unlikely to maintain its low fares in the long term given the high cost structure of its model, said RHB Research.
Malindo Air is positioning itself as a hybrid model, offering full service carriers' amenities for low-cost carrier (LCC) type fares.
Currently Malindo Air is promoting a one-way all-in promotional air fare as low as RM38 to Kuching from Kuala Lumpur and RM68 to Kota Kinabalu from Kuala Lumpur, much cheaper than the RM79 and RM89 LCC AirAsia is offering, respectively.
"With Malindo Air competing in the local aviation landscape by offering full service at low-cost pricing, this reminds us how Firefly's jet operations turned out, which were loss-making despite churning high loads," it said in a note to clients yesterday.
Comparing Malindo Air with Firefly's jet operations before it was shut down, RHB Research said Firefly's unit cost base could have been relatively lower than Malindo Air's due to the fact that in-flight meals were still charged at Firefly and Malindo Air has an additional in-flight entertainment cost to incorporate in its cost structure.
"We see Malindo operating at a high cost base at its initial start-up and it's only a matter of time that it will stop offering such low fares on the longer term," said the research firm.
RHB Research also expects both Malaysia Airlines (MAS) and AirAsia to take a hit from the start of Malindo Air's flights to Kota Kinabalu and Kuching.
Kota Kinabalu and Kuching account for 15% and 6% of AirAsia and MAS available seat per kilometre (ASK) respectively. "While MAS and AirAsia are potential losers from Malindo Air's entry, we see this as an opportunity for Malaysia Airports Holdings Bhd (MAHB) to expand its revenue base further," RHB Research said, reiterating an "overweight" call on the aviation sector with AirAsia as its top buy.
"Although the emergence of Malindo may put yields at risk, 2013 is shaping to be better year for both AirAsia and MAS. We expect the former to see its earnings grow by 6.9% on the back of higher contributions from its associates, and the latter possibly returning to the black with a small profit," it added.
Meanwhile, RHB Research said MAHB's 43% estimated earnings drop in 2013 largely due to a change in accounting entry, should not be a major concern.
"We expect MAHB's operational cash flow to further improve (in 2013), driven by a stronger 11% passenger traffic growth, coupled with higher passenger spending per passenger," it said.

Firefly not expecting negative impact from entry of Malindo

Firefly not expecting negative impact from entry of Malindo

 

Community airline, Firefly is not anticipating any negative impact to its operations and load factor, as new hybrid carrier, Malindo Airways prepares to start operations later this month.

Its Chief Executive Officer Ignatius Ong said competition was not something new to the five-year old airline, and believed, it would triumph due to several travel niches.

"There is still a high level of demand to be catered for. When Malindo Airways enters the industry, there would be competition. But I believe, there is room for everyone.

"With our operations based at the Subang city airport, we have a niche that our competitors do not have," Ong told reporters after Firefly's Career in Aviation Programme, here on Wednesday.

Malindo Airways is slated to commence operation on March 22 with a hybrid business model, which offers a full-service carriers' offering for low-cost carrier (LCC) type fares.

For a start, Malindo Airways has announced a one-way, all-in promotional air fare from as low as RM38 to Kuching and RM68 to Kota Kinabalu from Kuala Lumpur.

Ong said Firefly is not disturbed by the low-promotional fares that Malindo Airways is offering, as "new airlines have to seek passengers."

"I have even seen lower fares that what they (Malindo) are offering. At the end of the day, we must know how to keep our customers, and I am sure Firefly is on the right track," he said.

Ong said Firefly would be establishing Johor Baharu as its newest hub, besides the Subang and Penang airports at present.

"We have seen tremendous demand from Johor and are going to be very strong there in the coming months. It will be our new hub.

"The two new ATR turboprops to be given to us this year, will also be used to serve the Johor Baharu hub," he added. This year, he said Firefly would not be aggressively introducing new routes, but instead reinforcing some of the existing ones, while adding more frequencies to others where needed.

He also said firefly expects about 10 to 15 per cent growth in passengers this year, against the 1.7 million carried in 2012.

"If everything goes in line with our plan, we will be able to reach the two million passengers mark by year-end," he added.

The two million passengers target was initially expected to be realised by the end of next year, according to the business plan of Malaysia Airlines, Firefly's parent airline.

Hoping Malindo Air will keep fares real low

Hoping Malindo Air will keep fares real low

IN less than a month, the new low-fare upstart, Malindo Air, will be taking to the skies. Air travellers can then hope for bargain fares, and real good ones at that.

Those in Sabah and Sarawak can have their dream of increased connectivity come through, as they would now have another choice for a low-fare airline other than AirAsia. But of course, those who prefer premium travel could still fly with Malaysia Airlines. This will be their replacement for Firefly, which ceased its jet operations over a year ago. Air travellers here then were getting good bargains because the two airlines, Firefly and AirAsia, were fighting each other for passengers and were throwing fares to get them.

Two-way fares were just about RM200 and there were many happy travellers. Not that those fares are not prevalent today, but the fight for passengers was more intense then. It was unfortunate that Firefly had to abandon its jet operations, but the entry of Malindo is expected to stir things up a bit.

Malindo was conceptualised in the middle of last year by a chance meeting between Lion Air owner Rusdi Kirana and Nadi Sdn Bhd's Tan Sri Ahmad Johan.

Lion Air is the biggest domestic airline in Indonesia and it is natural for it to grow beyond the Indonesian market by setting up new hubs across Asia. Malaysia is its first stop and if this venture proves to be successful, it would move on to other South-East Asian countries to set up hubs the same way AirAsia has done.

AirAsia has hubs in Thailand, Indonesia, the Philippines and Japan. It has just entered into a pact to set up AirAsia India with the renowned Tata Sons and tycoon Arun Bhatia.

Lion Air is a successful model because Rusdi believes in low fares, low cost and access to all. It has the widest network in Indonesia and this traffic needs an outlet out of Indonesia, and that's where Malaysia will come in as a hub. Hence, Rusdi and Malindo CEO Chandran Ramamuthy are not worried about filling up their aircraft, although there was much scepticism initially whether the airline would take off.

Simply put, they could not sell tickets because Malindo did not have the most important document, the air operator's certificate or AOC, which is the licence to fly, yet.

This week, it obtained the AOC and is set to start selling tickets. Let's hope it provides the great bargain fares that AirAsia is so well-known for and all-in return airfares from Kuala Lumpur to Kota Kinabalu and Kuching of not more than RM200.

Malindo, incidentally, is targeting its inaugural flight from Kuala Lumpur to Kota Kinabalu and Kuching between March 20 and 30.

In this day and age, where travellers have direct access to information and know exactly how to look for bargains, Malindo has promised low fares, lower than the competition in fact. Let's hope it keeps to its word and keeps its fares really low.

More importantly, however, the airline is providing jobs for Malaysians and will hire a portion of the 1,000 unemployed pilots in the country.

So far, the airline has hired 164 people for its start-up operations, and will certainly need to hire more, especially the unemployed pilots. This, hopefully, relieves the anxiety that this group of people and their families have endured.