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Lion Air Considering CS300  
User currently offlinegolfradio From Canada, joined Jun 2009, 761 posts, RR: 2
Posted (11 months 1 week 4 days 10 hours ago) and read 8763 times:

Bombardier CSeries CS300 to fly with Indonesia’s Lion Air

Per report Lior Air is considering the CS300 and may be the launch customer for CS300. Purchase may be finalized at Farnborough next year

Quote:
“I just met Mike (Arcamone, president of Bombardier Commercial Aircraft), and I saw the CSeries — it’s very surprising. I never expected the aircraft to be ... beyond my expectation.”


39 replies: All unread, showing first 25:
 
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 1, posted (11 months 1 week 4 days 10 hours ago) and read 8771 times:

More aircraft for Lion Air? Amazing. Any idea about how many they could use?


Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinegolfradio From Canada, joined Jun 2009, 761 posts, RR: 2
Reply 2, posted (11 months 1 week 4 days 10 hours ago) and read 8746 times:

Quoting KarelXWB (Reply 1):

No mention of numbers. Not the A list customer but then every order counts. Even though I am very happy and I am still shaking my head at JT. What are they going to do with all these aircraft?


User currently offlineyowza From South Africa, joined Jul 2005, 4883 posts, RR: 15
Reply 3, posted (11 months 1 week 4 days 10 hours ago) and read 8679 times:

I don't want to start a flame war so if you think the following question is inflammatory please just tell me and I will delete it.

From an image management perspective the very last thing a fledgling design with modest orders wants is bad press. Lion have had more than a few incidents with their existing birds. Do you think BBD would (and has any manufacturer in the past) force fed pilots and operational practices to a customer?

YOWza



12A whenever possible.
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 4, posted (11 months 1 week 4 days 10 hours ago) and read 8522 times:

Bloomberg also has an article about this subject:

http://www.bloomberg.com/news/2013-0...-draws-interest-from-lion-air.html



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinegoosebayguy From United Kingdom, joined Sep 2009, 400 posts, RR: 0
Reply 5, posted (11 months 1 week 4 days 10 hours ago) and read 8495 times:

Maybe they are finding the 737 too tricky to fly and want a simpler aircraft?

User currently offlineneutrino From Singapore, joined May 2012, 607 posts, RR: 0
Reply 6, posted (11 months 1 week 4 days 10 hours ago) and read 8469 times:

Quoting KarelXWB (Reply 1):
More aircraft for Lion Air? Amazing. Any idea about how many they could use?

At least a hundred is my uneducated guess.

Quoting golfradio (Reply 2):
What are they going to do with all these aircraft?

Kissing the sea wall or getting into arguments with stray cows?
Seriously, I have totally no idea and couldn't even hazard a guess. They have something like over 500 on order against a current fleet of under a hundred. They way they keep on signing on the dotted line boggles the mind. The bubble just might burst one day though I hope not. Flew on them many times and will keep doing so.



Potestatem obscuri lateris nescitis
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 7, posted (11 months 1 week 4 days 9 hours ago) and read 8444 times:

Quoting neutrino (Reply 6):
They have something like over 500 on order

More like 700, but it's not yet enough:

Quote:
Lion Air already has 700 planes on order and expects to have ordered 1,000 aircraft within two to three years, Kirana said in March.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineLH707330 From United States of America, joined Jun 2012, 755 posts, RR: 0
Reply 8, posted (11 months 1 week 4 days 9 hours ago) and read 8373 times:

Indonesia is the world's fourth most populous country (246M) and is dotted on a huge number of islands, so commercial aviation is a major part of their transportation infrastructure. The environment is there for large expansion, given that GDP growth unleashes the potential demand. Having a Southwest-sized airline in a country of that size shouldn't turn heads, they just appear to bullish on growth.

User currently offlinerojo From Spain, joined Sep 2000, 2448 posts, RR: 9
Reply 9, posted (11 months 1 week 4 days 9 hours ago) and read 8373 times:

Quoting golfradio (Reply 2):
No mention of numbers. Not the A list customer but then every order counts. Even though I am very happy and I am still shaking my head at JT. What are they going to do with all these aircraft?

If they can't use them all, they will transfer them to their leasing company and enter the aircraft leasing business... since they will have premium slots for almost every NB aircraft, I'm sure they have this as part of their business plan.


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 10, posted (11 months 1 week 4 days 9 hours ago) and read 8210 times:

Bombardier confirms the meeting with Lion Air in Montreal.

http://twitter.com/e_russell/status/383311659453775872



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineneutrino From Singapore, joined May 2012, 607 posts, RR: 0
Reply 11, posted (11 months 1 week 4 days 9 hours ago) and read 8173 times:

Quoting KarelXWB (Reply 7):

Quoting neutrino (Reply 6):
They have something like over 500 on order

More like 700, but it's not yet enough:

I'm floored!      



Potestatem obscuri lateris nescitis
User currently offlineCentre From United States of America, joined Mar 2010, 489 posts, RR: 0
Reply 12, posted (11 months 1 week 4 days 8 hours ago) and read 8061 times:

Quoting LH707330 (Reply 8):
Indonesia is the world's fourth most populous country (246M) and is dotted on a huge number of islands, so commercial aviation is a major part of their transportation infrastructure. The environment is there for large expansion, given that GDP growth unleashes the potential demand. Having a Southwest-sized airline in a country of that size shouldn't turn heads, they just appear to bullish on growth.

  

from the Bloomberg article by KarelXWB

Quote:
Traffic at Lion Air will probably climb at least 10 percent annually in the next few years, Kirana said, citing growing demand for air travel as Indonesia’s middle class expands. About 70 million people flew in Indonesia last year, a 14-fold increase from 2000, he said.

from the NY Times

Quote:
The economy has been doing well — it survived the world’s 2008 financial crisis virtually untouched, multinationals have been flocking here and its gross domestic product has expanded at a steady rate of more than 6 percent for the last three years. Still, analysts consistently say Indonesia is being held back from reaching its full potential because of corruption and collusion among government officials, lawmakers and powerful business interests.
http://www.nytimes.com/2013/09/26/wo...on-the-streets.html?ref=world&_r=0

In my opinion, the financial case for 1000 airplanes is there



I have cut 4 times, and it's still short.
User currently offlineJoeCanuck From Canada, joined Dec 2005, 5437 posts, RR: 30
Reply 13, posted (11 months 1 week 4 days 6 hours ago) and read 7815 times:

As long as this doesn't turn out to be another Air Asia situation, this would be very good news for the program...but it does seem somewhat more likely.

Lion already has huge orders in from Boeing and Airbus so they really don't need to dangle a CS300 order to get discounts, but Farnborough is a very long way off. It seems a bit early to announce a likely order without actually at least signing a LOI.

Still, great if it happens but I won't be counting any chickens until the paper is signed.



What the...?
User currently offlinemandala499 From Indonesia, joined Aug 2001, 6849 posts, RR: 75
Reply 14, posted (11 months 1 week 4 days 2 hours ago) and read 7464 times:

Quoting neutrino (Reply 6):
The bubble just might burst one day though I hope not.

It is beginning to burst... OK, air leaks more like it!   

Quoting Centre (Reply 12):
In my opinion, the financial case for 1000 airplanes is there

The financial case? Sure... the on the field case? No.
A significant portion of the outstanding orders will not go to Lion Air Indonesia. Some will go to Malindo (reported to be taking the majority of the remaining 737-900ER orders, if it can get out of its mess of low loads), some will go to the upcoming Lion Air Thailand, and Lion Air Vietnam is said to be in the works.
On the Indonesian end itself, Lion's Batik Air is having some quiet growth, but nothing spectacular as yet, things are looking good but I think we'll have to wait until the end of the year to start seeing results. Lion Air Indonesia itself is banging itself on a proverbial wall thanks to the past policy of "growth above all else" with its bad sides. It continuously failed to improve ground services passenger experience, to the extent that they've made a U-turn and start taking on O'Leary and Fernandes style rants blaming the airport. Lion Air causes the CGK flight delays themselves by having more flights than the airport can handle, and blames the airport. Slot coordination has been made a joke by no one other than Lion. With the supply of foreign pay-to-fly pilots being cut after it is alleged that the CEO discovered 3 key persons in the company made it with 1.5 million dollars from the scheme, it's now struggling to fill the pilot seats of new planes. In 2013 alone there has been 2 waves of pilot resignation resulting in massive disruption... cause? Pilots are not happy with the working conditions (read: they're happy with the pay packages according to their contracts, but the hours the company is asking for, is alleged to exceed the regulatory limitations)... and yeah, headhunting/hijacking competitor's pilots is rife here... the transfer fees for pilots to move is higher than our top league footballers. It got so bad that last month or so, 200 passengers slept on the aircraft and apron overnight (yes, outside in the apron and under the aircraft) demanding their flight to take off after continuous delays due to allegedly by insiders, lack of crew... of course, the crew were held hostage onboard too.... they did that because they were afraid the aircraft would then be used for another flight (passengers were told it was an aircraft rotation issue due to weather etc... while there was no significant weather issue countrywide that day).

On top of this, the infrastructure cannot cope. CGK is probably now the world's busiest 2 runway airport in terms of movements with around 1200 movements per day. The terminals can't cope. Lion has outgrown it's exclusive use of Terminal 1A... it takes 1/2 of Terminal 1B (and squeezing Sriwijaya) and 1/2 of terminal 1C (and squeezing Citilink) and 1/3 of Terminal 3 (with Batik Air and and it's CGK-Bali+Lombok flights)... (international flights still from Terminal 2)... it has refused the offer of taking T1B & T1C for themselves with leaving T3... for the reason of their need to continue to squeeze their competitors... squeeze means squeeze it's competitors passengers with Lion Air customers literally taking over the terminal making it difficult for their competitors too. Nice strategy eh?

CGK is full (including runway slots), thanks to Lion. SUB is full, thanks to Lion... the upcoming new terminal will already be operating at capacity when it opens (reportedly to be exclusive for Lion), and runway slots will run out soon. New Medan Airport will be filled up soon. JOG's parking slots are full, used up by Lion. UPG is full, thanks to Lion...

With 20 flights a day between CGK and Medan, and I think a similar number between CGK and SUB, the 2 major airways are now clogged, so flights to other cities are delayed due to lack of airway slot (doesn't help that our ATC doesn't want to utilize vertical space real estate... but their reason is clogging of airspace at CGK, SUB and MES)...

Sure the business case of 1000 airplanes for Lion is there... the infrastructure can't keep up (partly thanks to Lion's past "persuasion" of limiting infrastructure growth prior to its first large 737-900ER order)... the human resources can't catch up within Lion nor at ATC, airports, regulators, etc (because everyone is growing)... the DGCA has said they're rejecting new AOC applications because of airport congestion and lack of personnel to oversee the growing airlines...

HR quality of newbies coming in is also in decline, the industry has built a reputation of "easy dumb condition for large pay", attracting, sorry, idiots into the industry... and to easily mass produce "trained" personnel, aerospace schools are now not putting attention to quality... we're getting quantities of young people who went through "seniority and "alma mater protection at all cost" training, who ended up having to have a lot of retraining once accepted (unless your airline just want to fill the ranks with idiots with qualifications for the sake of filling the quantity requirements and shifting the quality problems elsewhere), and difficult to accept criticism... Good smart guys in the DGCA is being sidelined in favour of these "smartasses" with backing by certain airlines (you can guess who)... so that the stupidity continues covered by an evergrowing quantity... (yes, 3 directors and sub-directors from the DGCA have complained to me)...

On one hand, I'm always happy to see these orders... more jobs, more access for air travel for the population, but behind the facade, it's a sad sad story bordering a, if not already a disaster.



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineCentre From United States of America, joined Mar 2010, 489 posts, RR: 0
Reply 15, posted (11 months 1 week 4 days 2 hours ago) and read 7380 times:

Quoting mandala499 (Reply 15):

quite an angry guy  

In what you mentioned I see a political issue in the ranks of the government rather than Lion Air.
How can you blame not expanding an airport on Lion air? Not sure how the political system works in Indonesia , bur I hardly see how is this a problem for the airline who wants to expand and make more money, arent they a business? and that's what business do....Make money.

If the government cant maintain the same standard of growth that businesses in the country have, then that's the problem of the political leadership rather than businesses....And makes me believe that the NY article above is so right when it said that Indonesia would have been a far better country than they are now if they have a different political leadership.



I have cut 4 times, and it's still short.
User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4503 posts, RR: 72
Reply 16, posted (11 months 1 week 4 days 1 hour ago) and read 7277 times:

Quoting Centre (Reply 16):
quite an angry guy

Not angry at all. Just a pretty objective description of the current situation in Indonesia. The business case may be there based on the transportation needs of millions of people, but neither the infrastructure nor the human resources for such a huge expansion will be available for many years to come.

Add to that the financial aspect of the entire setup: looking at the kinds of fares Lion air is able to charge on many of its trunk routes, I wonder how sustainable this is. Buying power maybe on the increase, but the main reason there is such a boom in air traffic is that air travel has effectively become cheaper than travel by bus, train or ship. That does however not imply that air fares can sustain the massive cost picture Lion Air must be dealing with. I have the distinct impression that the financial burden is becoming so heavy that the only way forward for the Lion Air group is continue a massive expansion in hopes of continuing to outrun increasing financial obligations. The question is for how long the company will be able to keep doing this.


User currently offlineCentre From United States of America, joined Mar 2010, 489 posts, RR: 0
Reply 17, posted (11 months 1 week 3 days 23 hours ago) and read 7046 times:

Quoting HB-IWC (Reply 18):
That does however not imply that air fares can sustain the massive cost picture Lion Air must be dealing with. I have the distinct impression that the financial burden is becoming so heavy that the only way forward for the Lion Air group is continue a massive expansion in hopes of continuing to outrun increasing financial obligations. The question is for how long the company will be able to keep doing this.

How is this any different from RyanAir or Spirit Airlines?

And the cost structure in Indonesia is much cheaper than that in the Western world



I have cut 4 times, and it's still short.
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 18, posted (11 months 1 week 3 days 20 hours ago) and read 6800 times:

Quoting Centre (Reply 12):
In my opinion, the financial case for 1000 airplanes is there

And Lion Air is not the only one, IndiGo too sees a fleet of 1,000 aircraft in the long run. I hope Bombardier will have a nice chat with them too, there's a lot of potential in Asia and Boeing and Airbus will not be able to deliver all those planes within a reasonable time window.

http://www.bloomberg.com/news/2013-0...travel-surges-corporate-india.html

Quoting JoeCanuck (Reply 13):
As long as this doesn't turn out to be another Air Asia situation, this would be very good news for the program...but it does seem somewhat more likely.

I missed this, what happened with Air Asia?



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineBD500 From Canada, joined Feb 2010, 35 posts, RR: 0
Reply 19, posted (11 months 1 week 3 days 20 hours ago) and read 6765 times:

Quoting KarelXWB (Reply 20):
I missed this, what happened with Air Asia?

At Farnborough 2012, Tony Fernandes was seen with Bombardier CEO Pierre Beaudoin (and claims they are personal friends) attending a presentation of the CSeries mockup in the color of Air Asia.

At the time, it was discussed that Bombardier was thinking about introducing a high density configuration of the CS300 at 160 seats to accommodate LCC needs. Mr. Fernandes said the operational advantages of the CSeries would allow Air Asia to reach airports they cannot reach with their current fleet.

In the end, the opted for the A320 family.
Many suggest Air Asia used their interest in the CSeries to lower the acquisition price of their Airbus.


http://www.flightglobal.com/news/art...-chooses-a320-over-cseries-379573/


User currently offlineMillwallSean From Singapore, joined Apr 2008, 1243 posts, RR: 6
Reply 20, posted (11 months 1 week 3 days 19 hours ago) and read 6727 times:

Quoting Centre (Reply 19):

How is this any different from RyanAir or Spirit Airlines?

And the cost structure in Indonesia is much cheaper than that in the Western world

Have you been to Indonesia? Seen what the major airports are like?
What youre suggesting is a businesscase thats very similar to BA doubling the flights from LHR.
Makes complete financial sense but still not realistic.

Lionair and their orders feels rather bizarre. Malindo I read above. Sounds great, but anyine thats been on a Malindo flight knows that its operation wont become bigger than 30 planes and the idea that it will be profitable with their present fares sounds very farfetched. Malindo Thailand, Malindo Vietnam (good luck with that Lion, previous foreign entities hasnt exactly had a stellar succes in Vietnam...)

Lionair needs to put their planes somewhere so im sure well see heaps of routes announces overseas, but profits? More close bases? The natural choice, Singapore, wont allow them to be shady or cook their local books for instance so thats a market I dont think they want to establish themselves in.

Still we westerners arent covered by insurance when we fly lionair or malindo. The insurance companies refuse it since Lion hasnt passed inspections. Thats not great when you want to win corporate contracts or start up in the tourist dependant Thai market...

Indoensia has potential and I am sure they will eventually build more stuff. But not within the timeframe Lionairs orders will arrive.
The present mayor of the Jakarta region shocked me when he met with western corporations and DIDNT want any money. In fact the man spoke about the potential in Indonesia and what the government could do to improve the businessclimate. We all left the meeting gobsmacked, a politician that invites businessmen and doesnt ask for generous donations? According to one 40 year veteran of the expat scene in jakarta, that has never ever happened before. There is hope, at least in the Jakarta region...



No One Likes Us - We Dont Care.
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11405 posts, RR: 33
Reply 21, posted (11 months 1 week 3 days 18 hours ago) and read 6575 times:

Quoting BD500 (Reply 21):
At Farnborough 2012, Tony Fernandes was seen with Bombardier CEO Pierre Beaudoin (and claims they are personal friends) attending a presentation of the CSeries mockup in the color of Air Asia.

...

Thanks, I forgot about this "coup".

Flightglobal and Reuters have additional information:

http://www.flightglobal.com/news/art...lace-cs300-order-in-months-391040/
http://www.reuters.com/article/2013/...dier-cseries-idUSL2N0HM1Z220130927

Quote:
Indonesian low-cost carrier Lion Air aims to finalise an order for the Bombardier CSeries by end-2013, and expects to meet the airframer next month to work out the details.

...

Lion Air's chief executive Rusdi Kirana tells Flightglobal that the number of CS300s it will order will be in the double-digit range, and deliveries could occur as early as 2016.

...

"We are interested to operate the CS300 on long thin routes both domestically in Indonesia and internationally. We see that the size of the CSeries could be useful. Presently we operate 72-seat ATR 72s and 189-seat 737-800s and 215-seat 737-900ERs, so for us the CSeries fills a gap between the ATR 72 and the 737-800."

The C300's capacity makes it ideal for routes where passengers don't quite fill 737-800s.

So it looks like they are very serious about this.

Boeing and Airbus will have their hands full with delivering all those 737s and A320s, having a third supplier should accelerate Lion Air's growth even faster.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2965 posts, RR: 0
Reply 22, posted (11 months 1 week 3 days 18 hours ago) and read 6540 times:

I agree with an earlier post... Wheres the infrastructure to handle all this? The demand may be rising, but wheres the China styled airport construction program of having any chance of making this work? It needs to rapidly increase what it is doing to make any of this not cause MAJOR issues in only a few years.

1,000 aircraft? Insane.


User currently offlineneutrino From Singapore, joined May 2012, 607 posts, RR: 0
Reply 23, posted (11 months 1 week 3 days 14 hours ago) and read 5487 times:

Quoting Centre (Reply 15):
....And makes me believe that the NY article above is so right when it said that Indonesia would have been a far better country than they are now if they have a different political leadership.

On the other hand, it could also be argued that "Indonesia could have been a far worse country than they are now if they have a different political leadership." There are two sides to a coin. Who knows what a different political leadership would bring.

Quoting Centre (Reply 15):
Quoting mandala499 (Reply 15):

quite an angry guy

I don''t sense any anger in that post.
Disappointment, yes.
Disillusion, maybe.
Frustration, possibly.
Anger, certainly not.



Potestatem obscuri lateris nescitis
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 563 posts, RR: 0
Reply 24, posted (11 months 1 week 3 days 13 hours ago) and read 5251 times:

This along with Lions Air's other orders strikes me as a case of if we can get financing, we will buy it and see what happens. I believe the Ex-Im bank is financing the Boeing orders. Anyone know if the European counter part to the Ex Im is financing the Airbus orders? Does Canada have a similar institution?

Think of it another way: Who on here wants his or her private savings invested in Lion Air's credit risk for this many aircraft?


User currently offlineinfiniti329 From United States of America, joined Jul 2012, 656 posts, RR: 0
Reply 25, posted (11 months 1 week 3 days 13 hours ago) and read 5310 times:

Can they easily acquire the massive amount of pilots needed to run this operation of 700 + aircraft?

User currently offlinelightsaber From United States of America, joined Jan 2005, 13047 posts, RR: 100
Reply 26, posted (11 months 1 week 3 days 13 hours ago) and read 5303 times:
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I hope this comes through.

Quoting yowza (Reply 3):
From an image management perspective the very last thing a fledgling design with modest orders wants is bad press

   Bombardier needs a few large orders. Once they have a firm order book well over a thousand, they could think that way.

Quoting Centre (Reply 12):
In my opinion, the financial case for 1000 airplanes is there

Easy. Indonesia is going to expand quick.

Quoting mandala499 (Reply 14):
On top of this, the infrastructure cannot cope. CGK is probably now the world's busiest 2 runway airport in terms of movements with around 1200 movements per day.

Indonesia is far behind in all transportation infrastructure. Their economy will only grow with improved transportation.

Quoting HB-IWC (Reply 16):
The business case may be there based on the transportation needs of millions of people, but neither the infrastructure nor the human resources for such a huge expansion will be available for many years to come.

Then Indonesia will have to build the infrastructure. I see room for multiple Indonesian airports to build added runways/terminals and expand. It is one of several steps required to pull their people out of poverty.

What do you mean for 'human resources?' I see Indonesia under-utilizing their people, so they should be able to cope. Are there specific talent sets in short supply?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinemandala499 From Indonesia, joined Aug 2001, 6849 posts, RR: 75
Reply 27, posted (11 months 1 week 3 days 12 hours ago) and read 5365 times:

Quoting Centre (Reply 16):
quite an angry guy

Angry? No. If you want to see anger thrown at Lion Air, all you need to see is videos of passengers blowing their fuses whenever there's excess delay, or see what the Lion-haters write on the media, court cases, wherever... The pax having a riot at the airport happens with Lion repeatedly that the media now don't bother to cover that as news unless someone threw a garbage can at the ticket office, hold hostage a Lion Manager, or conduct a sit in at the aircraft and/or apron (sit-in/pax-strike at the boarding gate simply don't make the news anymore). If you want anger, go and look for those...

What I wrote was far from it, and no, I'm not joking about the stuff written.

Quoting Centre (Reply 15):
How can you blame not expanding an airport on Lion air?

I have heard allegations of at least 3 airports whose expansion was put on hold "on request" (accompanied by some brown bags of cash) by this carrier in an attempt to "squeeze out competitors out of parking slots". At the same time, some of their early methods of "market sabotage" was to deliberately park an MD80 across two parking stands during peak hour at some small airport using the reason of it's length and the not so long apron and the need for other aircraft to be able to taxi by... and hey hey, you just made your competitor divert because of "lack of parking stand" all of a sudden. Another of their favourite back in the MD80 days was to actually just park in straight at stand next to an apron entry taxiway, and block that entry/exit for the apron with it's tail, causing disruptions, holdings, etc (yes, small airports with 2 apron entry taxiways were a favourite for this method 10 yrs ago).

You don't want to know the past slot squatting operations they do (I'm sure HB-IWC knows this VERY well from the target's point of view) in order to prevent competitors using up that slot. (eg: publish 20 flights, fly only 10, rotate the ones you actually fly, make sure each slots are used every 3 weeks to prevent revocation... oh yeah, while actively 'persuading' competitors to give up theirs or reporting other airlines doing slot squatting).

Quoting Centre (Reply 15):
I hardly see how is this a problem for the airline who wants to expand and make more money

Oh well, I guess you haven't heard of the problems airlines have here for importing aircraft having to be put on hold because the "DGCA isn't convinced that the airline has adequate crew to operate the aircraft" (regardless if the airline wants to put the aircraft as a spare)... while this big red 737 operator has no problems even if it means 45 pilots has to fly exceeding the annual 1050 flying hrs limit last year... yeah, those were the ones that got caught, and who got the punishment? The pilots, the airline who asked for the rules to be broken, got away with it... oh, let's not forget the competitors who had pilots grounded because a 7-day flying hour limit was exceeded by 5 minutes, and the airline had a slap by the DGCA.

Furthermore, we have a silly 5 5 rule for scheduled operators here... you need to have 10 aircraft, 5 owned and the other 5 can be leased/hired/whatever... Airlines have been threatened to be shut down by the government for non-compliance, and even Lion Air has said, "we have no trouble of complying"... guess what, in April it was announced that Lion was amongst the carrier that had not complied, and this was again revealed early this month... but all the "threats against non-compliance" of this rule disappeared. Funny isn't it?

There seems to be a correlation between "government talk of freezing new AOC issues or industry expansion" whenever there's a rise in 'lack of payments to vendors' by Lion Air... After seeing this pattern for 10 years, you'd start to wonder what planet you're on at times.

Quoting HB-IWC (Reply 18):
The question is for how long the company will be able to keep doing this.

2011 - 2012 brought a lot of hope in how Lion actually tried to clean up inside. I mean they really did. Incidents and accidents per 10,000 departures rate went down by 90%, OTP went up, training per workforce headcount went up, passenger complaints per million revenue passenger kilometers went down, etc etc etc etc.... you name it, it was there... and it wasn't just talk... it did happen... BUT, all that change for the better started to fade after the announcement of Batik and Malindo... and the guys at the forefront of the change were shunted back and forth between Lion, Batik, Malindo and Lion Bizjets... resulting in the "usual suspects" and their understudies quickly cementing their grip on the grassroots once again!

Quoting Centre (Reply 19):
And the cost structure in Indonesia is much cheaper than that in the Western world

Despite using the most efficient airplane (in terms of cost per available seat kilometer), it does not have the lowest cost per seat kilometer in the country, and I think even some western LCCs beat it.

And much cheaper than the western world? Think again! Your basic newbie right-seater on the jet gets paid more than some of your regional jet captains... even our prop right-seater newbies gets the same salary as your prop junior captains, if you're in the right carrier (and it doesn't have to be on state-owned Garuda). Right seaters on the 320 with 1000hrs here earn the same or maybe more after tax than some of their European counterparts. The junior flight attendants here can earn more after tax than their European or American counterparts. This country isn't cheap when it comes to aviation... loads of costs... ground staff and junior engineers do earn less than their European and American counterparts, that one is for sure... but crew?

The 2 - 3 years ago the CASK for Southwest is lower than for Lion, I wouldn't be surprised if it still is. (I recall one day when WN was at 4.7c/SK, Lion was at 4.9c/SK).

Now, add that fact with a seat load factor of "filled to the brim 90% of the time", but with a very low "average ticket price per seat kilometer", HB-IWC's question is a very valid one. And before I continue, I'll quote a question from you...

Quoting Centre (Reply 19):
How is this any different from RyanAir or Spirit Airlines?

You can see their cost numbers if not directly then through their financial reporting. LionAir, is not publicly listed.
Ryanair and Spirit are LCCs... LionAir is an Low Fare Carrier, not an LCC...

Go and look at the average fare paid per seat hour, only Batavia would beat it's price when it lasted. Lion often sell average fare for a flight below cost of other airlines with lower CASK than Lion! This isn't just simple observation based from seeing the prices on their website... talk to the reservations control for Lion and it's competitors, you'd start having the same question as HB-IWC.

This is also an airline that refused to give numbers to validate its nomination for awards...

Start having business negotiations with them (anything outside provision of aircraft), and you'd wonder how the hell these guys survive and thrive... Have a meet about datalink with one of the directors, and you'd end up spending 1 hour talking about his needs for a local tire factory to make plane tires for him to save cost etc etc etc...

Quoting IndianicWorld (Reply 22):
Wheres the infrastructure to handle all this?

Answer1: Malaysia, Thailand, and Vietnam
Answer2: A big proportion of the outstanding orders are replacement aircraft starting 2017, not fleet expansion.

Quoting neutrino (Reply 23):
I don''t sense any anger in that post.
Disappointment, yes.
Disillusion, maybe.
Frustration, possibly.
Anger, certainly not.

Nicely put...   

---
And yes, apart from the large outstanding orders for the NGs and MAXes and NEOs, they've also recently announced they're ordering 50 - 100 N219s (local replacement for C212s and Twotter competitor). And yet, they still can't find a market for the 2 747-400s they operate to fly to... unless they've banished them forever from its fleet list...



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineneutrino From Singapore, joined May 2012, 607 posts, RR: 0
Reply 28, posted (11 months 1 week 3 days 12 hours ago) and read 5015 times:

Quoting PlaneAdmirer (Reply 24):
Think of it another way: Who on here wants his or her private savings invested in Lion Air's credit risk for this many aircraft?

Me.  

Ok, ok... just maybe a tiny fraction of 1%.  



Potestatem obscuri lateris nescitis
User currently offlinemandala499 From Indonesia, joined Aug 2001, 6849 posts, RR: 75
Reply 29, posted (11 months 1 week 3 days 12 hours ago) and read 4953 times:

Quoting lightsaber (Reply 26):
Then Indonesia will have to build the infrastructure. I see room for multiple Indonesian airports to build added runways/terminals and expand. It is one of several steps required to pull their people out of poverty.

Unfortunately, building infrastructure isn't one of our "fast paced work" when it comes to transportation.
Let's look at the case of new Medan Airport, it was supposed to be an example of a "quick paced infrastructure development"... the airport opened recently, the jetbridges were reported to be off by a few meters from the designed location, so to save cost, they just repainted/moved the parking centerline... the problem is, the underground fuelling pipe port for the parking stand would be under the wheels for certain types parked there. There's no nearby hospital there too, so if there's a crash, expect lack of first responders, resulting in lots of post-accident deaths/worsening injuries. The highway isn't completed because no one knew who was supposed to pay for it too... etc etc etc...

The then new terminal at UPG was another "quick project"... result? 2 contractors built the terminal from either end... at the center, their construction was misaligned by 2m...   

The law now allows private companies to construct and operate airports, but unfortunately these privately funded airports now has to be:
1. Not included in the country air transportation master plan
2. Made in conjuction with either of the 2 state owned airport operators/owners if the airport is part of the master plan.

#2 usually results in the original business plans 'altered' and made less feasible to cater for outdated "interests".

To get #2, the parliament usually has a dabble too, then the provincial governments and provincial legislatures too, etc... in the end, it just becomes a time-consuming cost madness.

Quoting lightsaber (Reply 26):
What do you mean for 'human resources?' I see Indonesia under-utilizing their people, so they should be able to cope. Are there specific talent sets in short supply?

Anything that requires a vocational qualification or license in aviation is in short supply.
The technical schools, academies, etc, churns out a lot of graduates with low skills (thanks to some dreamed up curriculum made by seniors who were invited to make the curriculum based on seniority and not knowledge of the market's needs), insistence on getting high pay (because the schools promised them "work in aviation by getting an easy education and high salaries"), and airlines don't usually have the budget to train enough people to meet their required standards, so they either just take in what's available and pretend the skills are adequate, or they accept shortages and train them properly according to the budget they can afford, or both.

The MRO sector alone is suffering from a massive shortage. ATC is having a shortage... there's a pilot shortage too... and there's a shortage of inspectors at the DGCA.

Quoting infiniti329 (Reply 25):
Can they easily acquire the massive amount of pilots needed to run this operation of 700 + aircraft?

Until recently, the easy way to get pilots is to tap into the surplus in Europe, under the pay-to-fly scheme... pay $50,000 or so to get 200 - 500hrs of line training, and recover some of that back as a small salary, and get hired properly at the airline at the end of the P2F session. Unfortunately, in the past 2 years, 50% of the jet aircraft accidents on take-off and landings have involved foreign P2F pilots or foreign post-P2F pilots. This prompted the DGCA's chief inspector pilot ban all "pilot imports" unless they have 250 hours experience on the type they're going to fly on. This effectively cut off the supply for foreign pilots to come in.

Sadly, the low quality of some proportion of the P2F pilots are due to the programs being rushed, lack of check pilots (leading to excessive workloads of check pilots/examiners), and also the P2F "commissions" system. If a P2F person failed to pass the check for line training/flying, he/she cannot get refunded because the money has been used to pay for commissions and therefore it was "cheaper" to use the remaining money to "persuade" someone to allow the person to pass the checks.

The situation got so bad (it's very tempting for airlines to simply just admit P2F candidates from agents, despite all those risks) that self-sponsored type-rated foreign pilots not applying through agents had their applications binned... and also local trainee pilots got held up because it was "less costly" for the airlines to pump the P2F through the sim checks etc... So non-agent foreign newbie pilots and local newbie pilots, were being sidelined.

So this method is no longer available due to abuses that occurred not so long ago. (1 Training Manager at 1 airline was told to go elsewhere for "raking in profits supplying pilots to competitors", at Lion, 3 operations key personnel were "asked to retire promptly" after the CEO discovered they were making 1.5 million dollars in commissions for accepting foreign P2F applicants and "processing them in a speedy fashion". And it was also alleged that several immigration officials were reprimanded for colluding with P2F agents to reject non-agent foreign pilot work permit applications... the list of these sorts of things are just seemingly endless).



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineDash9 From Canada, joined Nov 2008, 196 posts, RR: 0
Reply 30, posted (11 months 1 week 3 days 11 hours ago) and read 4823 times:

Quoting PlaneAdmirer (Reply 24):
Does Canada have a similar institution?

Yes there is such an institution, the Business Development Bank of Canada
http://www.bdc.ca/en/Pages/home.aspx


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4724 posts, RR: 39
Reply 31, posted (11 months 1 week 3 days 11 hours ago) and read 4717 times:
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Quoting mandala499 (Reply 27):
What I wrote was far from it, and no, I'm not joking about the stuff written.

You gave a fantastic insight view on the situation of aviation in fast growing Indonesia. Being for 50% of Indonesian blood myself I found these post very interesting to read and I have to complement you on how detailed you have described the situation.  .

Which makes me wonder how fast the growing plans are going to be crossed by the airport congestion at the airports you described. It seems there is not much room (if any) for possible CS300's from Bombardier. I hope some new airports will soon be build to cope with traffic demand. And the Indonesian economy needs a good infrastructure for planes, trains, subways and automobiles.


User currently onlineFlighty From United States of America, joined Apr 2007, 8498 posts, RR: 2
Reply 32, posted (11 months 1 week 3 days 10 hours ago) and read 4331 times:

Can we have someone knowledgable explain the traffic growth in Indonesia? What is the network?

Not only interesting in airline terms, but it can also be a window into the confusing economy (at least for outsiders) in that area.


User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 563 posts, RR: 0
Reply 33, posted (11 months 1 week 3 days 8 hours ago) and read 4202 times:

Quoting Dash9 (Reply 30):
Yes there is such an institution, the Business Development Bank of Canada

Is it then reasonable to assume that the Business Development Bank of Canada (your taxpayers, I assume) will be funding this purchase?


User currently offlinequeb From Canada, joined May 2010, 671 posts, RR: 3
Reply 34, posted (11 months 1 week 3 days 8 hours ago) and read 4176 times:

Quoting PlaneAdmirer (Reply 33):
Quoting Dash9 (Reply 30):
Yes there is such an institution, the Business Development Bank of Canada

Is it then reasonable to assume that the Business Development Bank of Canada (your taxpayers, I assume) will be funding this purchase?

Not BDC, it's EDC (Export Development Canada).

Here's an example:
http://www.edc.ca/EN/About-Us/News-R...ases/Pages/edc-agreement-icbc.aspx


User currently offlineDash9 From Canada, joined Nov 2008, 196 posts, RR: 0
Reply 35, posted (11 months 1 week 3 days 8 hours ago) and read 4163 times:

Quoting queb (Reply 34):
Not BDC, it's EDC (Export Development Canada).

You are absolutely right, I confused EDC and BDC. Both deal with corporate 'welfare', BDC internally and EDC externaly  


User currently offlinelightsaber From United States of America, joined Jan 2005, 13047 posts, RR: 100
Reply 36, posted (11 months 1 week 2 days 22 hours ago) and read 3857 times:
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Quoting mandala499 (Reply 29):
Anything that requires a vocational qualification or license in aviation is in short supply.

Yet Indonesian aviation is growing quick. I see the frustration. Yet somehow it has expanded.

What happened to the 45 airports under construction for Indonesia?
http://www.routesonline.com/news/37/...s-big-plans-for-airport-expansion/


For example (and on thread), Lion air is going to expand its Batam hub (future tense, in other words they see room to expand):
Lion Air Group is planning further expansion at its Batam hub with several new domestic routes by early 2014 followed by the launch of international services by the end of 2014. Flights to Bangkok, Guangzhou, Hong Kong, Kuala Lumpur and Jeddah are part of an ambitious plan by Lion to position Batam as its major Indonesian hub for domestic to international connections.

%u201CWe hope by first quarter of next year every city of Indonesia will go to Batam,%u201D Mr Kirana says, specifically citing Balikpapan, Denpasar, Makassar and Pontianak.

http://centreforaviation.com/analysi...-to-nearby-singapore-changi-130685

It might get very congested... but grow however one can grow or someone else will.

Or, as noted before, the other option is to take the "Lion Air" brand and expand elsewhere in the region.

But the expansion at three of the airports will be completed (or at least was scheduled) this year:
http://www.thejakartapost.com/news/2...ree-airports-be-expanded-2013.html

Talk about overcroweded: Sepinggan Airport, for instance, accommodated 5.1 million passengers in 2011, three times its current maximum capacity of 1.7 million passengers a year.

But the new terminal should handle enough (11 million).

Juanda won't be expanded enough, but more terminal space will mean more passengers...

And the expansion in Bali is impressive (25 million pax/year). How is that going?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineZKCIF From Lithuania, joined Oct 2010, 296 posts, RR: 0
Reply 37, posted (11 months 1 week 2 days 13 hours ago) and read 3417 times:

Quoting lightsaber (Reply 36):
And the expansion in Bali is impressive (25 million pax/year). How is that going?

what I saw looked disastrous. lion was failing to control HUGE crowds at the FEW check-in counters while other airlines seemed to do ok or so-so. the crowds at the check-in baggage screening machine were out of control.


User currently offlinelightsaber From United States of America, joined Jan 2005, 13047 posts, RR: 100
Reply 38, posted (11 months 1 week 2 days 9 hours ago) and read 3178 times:
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Quoting ZKCIF (Reply 37):
what I saw looked disastrous. lion was failing to control HUGE crowds at the FEW check-in counters while other airlines seemed to do ok or so-so. the crowds at the check-in baggage screening machine were out of control.

That sounds as if the terminal expansion is past due. Indonesia's economy is growing, so that means more passengers. While the airports might lack amenities, if enough infrastructure is built they will grow. Its not good that some Indonesia airports are being run at 3X or more their design capacity. But we've seen US airports run at 2X capacity during boom times.

Must they expand?    Will that create opportunities for further Lion air expansion.    Will there still be overcrowding and we will see the 'weak links' of the Indonesian expansion.

But right now, Indonesian factory wages (per the last reference I read) are below $1.50 per hour in competition with China and Thailand at $4/hr. In the basic fundamentals of economics there is capitol, labor, and resources. Indonesia currently has a surplus of resources and labor and a lack of capitol. So that means flying around investors (hopefully on their own nickel) to build new business.

I see Lion buying these CS300s. Or maybe that's just hope. But in terms of finding room to expand, I see it.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinelutfi From China, joined Sep 2000, 774 posts, RR: 0
Reply 39, posted (11 months 1 week 1 day 3 hours ago) and read 2557 times:

Re airports - yep will take a long time. And they are building them in the wrong places. E.g. the new Jogja airport will be 2 hours away from Jogja, vs the current 20-30 minutes (we had been looking to buy 2nd home in Jogja, but this killed it)

I remember the new terminal building at Juanda. Nice, but too small on day 1 (only 8 airbridges) Plus, insiders bought up much of the land for the access road & asked for absurd amounts, so when it opened the access road wasn't there (since improved)


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