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Gonzalo
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AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 12:06 pm

With the known rivalry between the CEO's of Air Asia and Lion Air, and the recent ( big ) orders for ( big ) fleet expansions, the competition for airport slots, pilots, trained crews and passengers will be a real commercial war for the Asian market. This could be positive for the average passenger with lower fares, but.... is this scenario sustainable in the long term ?

Thoughts ?

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 1:26 pm

This is about the hundreds of millions in the middle class in Indonesia.
 
UALWN
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 1:44 pm

Quoting jfk777 (Reply 1):
This is about the hundreds of millions in the middle class in Indonesia.

Well, Indonesia's population is less than 250 million right now. So the middle class surely contains less than "hundreds of millions."
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 1:55 pm

Quoting UALWN (Reply 2):
So the middle class surely contains less than "hundreds of millions."

That's why I'm asking this question....While the population of Asian countries is surely BIG, the percentage of people with real access to the aviation market seems to be very limited, hence my doubts of two airlines becoming some sort of giant LCC at the same time and for the same market ( BTW, there are certainly other players like legacy carriers fighting for their market share too ) ..... Will the cake be enough for everyone ?

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 3:25 pm

Quoting Gonzalo (Reply 3):
the percentage of people with real access to the aviation market seems to be very limited

Its exactly airlines like Air Asia and Lion Air that open up the world of aviation to people.

They are taking people out of buses, ferry boats and trains and putting them in planes.

Just Indonesia alone their government forecast that airline travel will grow from 60 million to over 200 million trips in under 5-years
The domestic enplanements grew at rate of 23% for the first half of 2012, and the country has some 148 airports.

Also per the WSJ "middle class" in Indonesia is estimated at 74mil, but will reach more than 140mil by 2020.
According to them that would be the biggest boom anywhere in the world outside of China and India, with more than 8 million new affluent consumer each year anxious to exert their purchasing power.

Imo there is tremendous amount of opportunity for growth in these markets.

The biggest headache I believe in the region is infrastructure - ATC capacity, runways, terminals, roads etc., not lack of passengers.
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Stitch
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 3:37 pm

RyanAir and easyJet both seem to be doing well dividing Europe between them.

So I don't see why Lion Air and Air Asia cannot divide Southeast Asia and the Indian subcontinent between them considering the population and improving standards of living.
 
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 4:18 pm

Quoting Stitch (Reply 5):
So I don't see why Lion Air and Air Asia cannot divide Southeast Asia and the Indian subcontinent between them considering the population and improving standards of living.

I don't see JT "dividing" Southeast Asia and the Indian subcontinent anytime soon with the AK group. JT's network structure is still heavily skewed towards Indonesian domestic connections, with a very weak international network (only four regular destinations: PEN, KUL, SIN and SGN, of which only KUL and SIN are directly served from CGK).

In fact, in terms of international connections, the strongest LCCs aside from the AK group are the Tiger Airways group (TR/DG/RI) and Scoot, Cebu Pacific and Jetstar (3K/VF), in that order. I'm imagining AK duking it out with them rather than JT, where Indonesia AirAsia is still significantly smaller.
 
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Mon Mar 18, 2013 4:59 pm

Quoting LAXintl (Reply 4):
The biggest headache I believe in the region is infrastructure - ATC capacity, runways, terminals, roads etc., not lack of passengers.

That makes sense. In fact, I wonder where this airlines could park their fleets if some unusual situation arises ( say a typhoon, or a long strike, etc. ).... they will be obligated to distribute their planes in several airports until the things back to normal, and that should be expensive...

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 3:45 am

Quoting Gonzalo (Thread starter):
will be a real commercial war for the Asian market.

Lion Air is trying to be the first LCC to launch a direct competition with AirAsia in its home turf, something no other foreign LCC has done, surprisingly. This may be beneficial to Malaysian travellers where MH is not exactly competing well at all domestically.

That said, with AirAsia's rock-bottom fares, I do wonder just how much lower fares can go...
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 4:34 am

Quoting huaiwei (Reply 8):
That said, with AirAsia's rock-bottom fares, I do wonder just how much lower fares can go...

AK Group has raised their fares a lot, for about two years with no fuel surcharge I never paid more than $10 for their tickets. Indo domestic is also 2x price compared to when good old Adam Air dumped seats at very low fares always the night before if seats were there.
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 7:34 am

I would think that Indonesia would be a huge market to tap into, but just how things pan out in KUL is another matter.

AK already has significant service at KUL, whilst the new competitor also had grand plans. Theres only so much of a market in Malaysia, so it will be interesting to see just how that ends up going.

With the amount of planes on order for both carriers, it surely will be a very interesting spectator sport for a while to come.
 
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 8:30 am

Quoting Lufthansa747 (Reply 9):
AK Group has raised their fares a lot, for about two years with no fuel surcharge I never paid more than $10 for their tickets. Indo domestic is also 2x price compared to when good old Adam Air dumped seats at very low fares always the night before if seats were there.

Air Asia did raise their fears a lot, half of the time it is cheaper for me to fly Hong Kong Arilines (HX) than AK thru KUL.

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 6:08 pm

Both airlines are well prepared for the ASEAN Open Sky beginning in 2015, where any ASEAN carriers can launch a flight between any ASEAN capitals regardless of their country of origins.

AK and JT are on set to become one of the world's giant LCC like Southwest, Ryanair and easyJet.

The hundreds of new aircraft will not be delivered overnight. Some might be for fleet renewal in a couple of years time.

Both airlines have new business ventures that warrant these aircraft:

AK - new ventures with AirAsia India and growth plans for AirAsia Japan and AirAsia Philippines.
JT - new ventures in Malaysia, a hybrid - Malindo Air (OD) which will start flying on 22 March 2013 and new premium airline in Indonesia - Batik Air.

Both have its own strengths:

AK - multiple countries (6) brands + long haul arm (AirAsia X), controlled 62% of domestic market share in Malaysia, QZ has the biggest market share for international market in Indonesia. As a group, (AK, FD, QZ, D7, PQ, JW and AirAsia India) is so much larger than JT.

JT - operates at a much higher ASK than AK (only) at 810,548,478 per week i.e. much higher than LX, NZ, AZ, 9W or AB. Controlled 40% of domestic market share in Indonesia, a massive booming economy. Malindo (OD) is expected to put a lot of pressures to AK's dominance in Malaysia.
 
mandala499
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 7:53 pm

Quoting Gonzalo (Reply 3):
While the population of Asian countries is surely BIG, the percentage of people with real access to the aviation market seems to be very limited, hence my doubts of two airlines becoming some sort of giant LCC at the same time and for the same market ( BTW, there are certainly other players like legacy carriers fighting for their market share too ) ..... Will the cake be enough for everyone ?

Well, in 2012, there was about 72 million domestic passengers... which when added with:

Quoting LAXintl (Reply 4):
Also per the WSJ "middle class" in Indonesia is estimated at 74mil, but will reach more than 140mil by 2020.

Means, by 2020 there'll be about 140 million.
Local industry analysts have actually put 120 million as the lower conservative end by then, but if infrastructure lags further behind, it'll be about 100 million.

Quoting Gonzalo (Reply 7):
That makes sense. In fact, I wonder where this airlines could park their fleets if some unusual situation arises ( say a typhoon, or a long strike, etc. ).... they will be obligated to distribute their planes in several airports until the things back to normal, and that should be expensive.

Long strike? Don't really happen here. No typhoons here that goes for days, but severe rainstorms can be as bad as typhoons, which can result in 1-2hrs a day where the aircraft cannot land, and goes for days. But the worst was I think 2-3 years ago, it rained so much CGK airport flooded in parts, and CGK closed for about 1/2 a day... Nearby HLP was full, JOG, SRG, SOC, and PLM were full of diverted aircraft, BDO was closed due to weather too. It took some airlines a week to get the backlog free. Some diverted to SUB and as far as DPS and SIN and BTH... it was bad enough in SUB that the airport had to open only for refuel diverted planes to go elsewhere otherwise SUB itself can't cater for non-diversions. Why it took so long to get the backlog free? Simple, not enough space at the airports!   

AMI now has a new airport, but capacity really haven't increased. UPG's increase in capacity is already filling up. SUB's 'new' terminal is now full, and the old unused terminal being rebuilt, and is set to be full from when it reopens. DPS is getting a revamp, the now remote parking will have direct terminal access, which given the growth, will run out of space soon. JOG is full, new airport still haven't been constructed. MLG is air force constrained, SRG is full, new terminal still underconstruction, CGK's new T3 inlet apron is now already full and it has only recently finished construction, BDO is way oversubscribed requiring some very creative slot coordination, MES is now well, a mess... new airport hasn't finished construction, and the current phase of construction is set to be full within 12 months of opening, PKU is full, PNK is full and new apron and terminal isn't fully completed, BDJ same story, BPN full, DJJ full...

Only SOC and BTH are probably the only airports not full, the rest are well, not hot destinations.

Full means, no more spare ideal slots...

Quoting 9MMAR (Reply 12):
The hundreds of new aircraft will not be delivered overnight. Some might be for fleet renewal in a couple of years time.

For Lion Air's case, they're already looking to replace their early build 737-900ERs and 737-300/400 (sole remaining MD80 and 90 to go too!)... If they stop their growth and replace older aircraft, all their remaining 737-800/900ER backlog from the first 178 orders, will simply just replace attrition and retired frames... the MAX orders, well, won't come for a while, and when it comes will replace the current replacements. Then they still got Malindo and Batik... so yeah, need those planes I guess !   
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 8:49 pm

So here you have two countries totaling 270M people with some 800? new narrowbodies coming online in the next 10 years. It seems pretty staggering to think that's sustainable for both companies. Does anyone know how many narrowbodies there are in the US? I'm sure there are plenty more than 800, maybe even double that, but this market is very mature and still resembles a bloodbath every 3-4 years.

I'll put myself down as a disbeliever and wait to be told I was wrong in 2022.
 
mandala499
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 9:04 pm

Quoting wingman (Reply 14):
but this market is very mature and still resembles a bloodbath every 3-4 years.

It's a bloodbath on a daily basis here. Yet they're still growing somehow...

We got Indonesia Air Asia, Lion and Citilink rapidly growing now, the slack from the collapse of Batavia is no longer there... all taken up... Despite the growth, there'll be another collapse soon (between 1 to 5 yrs depending who you talk to).

We still lack airports!

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 9:39 pm

Quoting mandala499 (Reply 15):
It's a bloodbath on a daily basis here. Yet they're still growing somehow...

We got Indonesia Air Asia, Lion and Citilink rapidly growing now, the slack from the collapse of Batavia is no longer there... all taken up... Despite the growth, there'll be another collapse soon (between 1 to 5 yrs depending who you talk to).

We still lack airports!

Hi Mandala, Thanks for your ( always ) great posts.
Please, don't take the following question as a disrespectful attitude to any crew or company ( I know you are very involved with the aviation of Indonesia with close friends in the industry ) . One of the things I mention in my original post is :

Quoting Gonzalo (Thread starter):
the competition for airport slots, pilots, trained crews and passengers will be a real commercial war for the Asian market.

So, what about ( a possible shortage of well ) trained crews ?

I mean, every year during the rainy season we hear about runway overruns in Indonesia, and some of these incidents are frequently related with poor CRM, fatigued crews, pilots suffering "Go Around-o-phobia" and similar issues.... consider you obviously need more than one crew for each aircraft, and here we are talking about several hundreds of new planes in the coming years. Add to that ( AFAIK ) there are some shortage of pilots in neighbouring countries like China or India, where there are also very fast-growing markets, needing hundreds of pilots too.....


Thanks in advance !!!

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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Tue Mar 19, 2013 10:45 pm

Hi everyone.

I just saw this article in a local news recently, and may be related to this discussion thread. Apologies in advance that the news link is in Bahasa Indonesia only, tried to find those in English with no reliable results.

http://www.tempo.co/read/news/2011/0...salkan-Lion-Air-Pindah-Ke-Malaysia

It is mentioned in the news that Lion Air is planning to move part of their base into Malaysia. Apparently it is mentioned that the " Malaysian government has allocated 2.5 hectares of land for a ten-years rent by Lion Air at a rate of US$ 3,600 per month " (which I think is just a piece of cake for Lion Air who are capable ordered billion dollars worth of Airbus/Boeing).

Apparently Lion Air is interested with the offer especially after the disappointment with the MDC airport management who asked for 51% of Lion Air share after the agreement to built a hangar, and base some of the Lion Air fleet in their property.

Initially I thought the news was discussing about Malindo Air, Lion Air's new carrier in Malaysia. However, apparently the move was meant for the supposed-to-be Lion Air hub in MDC.

With the recent article, I was just thinking, is Lion Air trying to pull a direct competition at Air Asia's home base? And how would this affect the competition between these "Major LCCs" in Southeast Asia?

Regards,
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Thomas_Jaeger
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 2:01 am

Quoting wingman (Reply 14):
So here you have two countries totaling 270M people with some 800? new narrowbodies coming online in the next 10 years. It seems pretty staggering to think that's sustainable for both companies. Does anyone know how many narrowbodies there are in the US? I'm sure there are plenty more than 800, maybe even double that, but this market is very mature and still resembles a bloodbath every 3-4 years.

Very interesting question, here are the numbers from our database:
318: 2
319: 285
320: 442
321: 79
717: 106
733: 135
734: 78
735: 27
736: 6
73G: 546
738: 540
739: 86
D95: 17
M82: 109
M83: 145
M87: 10
M88: 123
M90: 62

So 2798 narrowbodies right now in the US.

Population of 315.5 million, around 112,759 people per narrowbody.

Indonesia has 238 million and this fleet:
320: 45
732: 17
733: 39
734: 19
735: 22
73G: 1
738: 74
739: 67
M82: 2
M83: 1

So 287 narrowbodies in Indonesia right now. That is 829,268 people per narrowbody. Indonesia geography obviously increases the necessity for air travel on certain routes.

PS: I was too lazy to filter out freighters, government and private aircraft for this now, but I guess it shows the overall trend.
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 2:15 am

Quoting Thomas_Jaeger (Reply 18):
here are the numbers from our database:

Hi Thomas, many thanks for your input. So, compared with the U.S., population/aircraft relation is basically 7,3 times higher in Indonesia. I guess that helps to balance the difference in the strength of the middle class for each country.

Interesting times ahead...  


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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 3:09 am

I'm actually curious as to what the impact of full ASEAN open skies will be to the region's single aviation market. Most people don't know this, but ASEAN already has open skies for the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area) region, and the open skies regime for BIMP-EAGA has had a negligible impact. While there are a handful of new routes (ZAM-SDK, for example, is restarting for the fourth time in roughly 15 years), many of the plans for taking advantage of BIMP-EAGA open skies have yet to materialize. For example, AK said it was planning to launch ZAM-BKI and DVO-BKI, but nothing has happened.

If the BIMP-EAGA experience is an indicator of how we will implement open skies in Southeast Asia, I can only imagine how full ASEAN open skies will work. As far as I see it, I don't expect JT (or Malindo) to start launching international services in rapid-fire fashion come 2015, especially when the single aviation market comes with states who may be still out to protect their own airlines (e.g. the highly-regulated aviation markets of Vietnam, Laos and Myanmar/Burma).

EDIT: I was reading this CAPA analysis on AirAsia's expansion, and it says that Indonesia and the Philippines have not signed on to full ASEAN open skies (formally the ASEAN Multilateral Agreement on Air Services). I wonder what this could mean?

http://centreforaviation.com/analysi...-and-potentially-all-of-asia-95690

[Edited 2013-03-19 20:23:13]
 
mandala499
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 4:57 am

Quoting Gonzalo (Reply 16):
Please, don't take the following question

No problems actually!   

Quoting Gonzalo (Reply 16):
So, what about ( a possible shortage of well ) trained crews ?

Airlines thought that by taking in foreigners it would be a solution, that is, until, the agents decided to make a financial fortune out of foreign ab-initio recruitment through the Pay-2-Fly scheme. After incidents/accidents involving these "pay-2-fly" right seaters, the government slapped the airlines with a "250hrs on type or over for foreigners" restriction... (and agents are still now asking for... $30-50K USD for someone with the qualification and hours to apply to some airlines here! ridiculous).

Quoting Gonzalo (Reply 16):
I mean, every year during the rainy season we hear about runway overruns in Indonesia, and some of these incidents are frequently related with poor CRM, fatigued crews, pilots suffering "Go Around-o-phobia" and similar issues

I recall more than 75% of the jet overruns here last year or two, involved pay-2-fly ab-initios on the right hand seat. Not saying all of them were bad, but, the airline selection process is what's being questioned.

Quoting Akiestar (Reply 20):
EDIT: I was reading this CAPA analysis on AirAsia's expansion, and it says that Indonesia and the Philippines have not signed on to full ASEAN open skies (formally the ASEAN Multilateral Agreement on Air Services). I wonder what this could mean?

Both our countries are adopting limited Open Skies, which means by 2015:
1. No restrictions for capital city to capital city flights, including 5th freedom flights.
2. No restrictions for capital city to designated open skies destination in another country, including 5th freedom rights.
3. No restrictions for designated open skies city to another, including 5th freedom rights.

"limited" means, for number 2 and 3, not all international airports in the host country is a designated Open Skies destination. However, I think that also comes at "no restrictions at bilateral reciprocity of cross border flights between member states", but whether that means no restrictions in capacity or designated carriers, remain unclear.

Indonesia and Phillipines have agreed to reconsider full ASEAN Open Skies after 2018, for implementations of the next phases in 2020 and 2025. There's now interest amongst some airlines here (you know who) for a jump for Indonesia to go from limited open skies to ASEAN Single Aviation Market in 2020... but that's far fetched at the moment.

Mandala499
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 7:36 am

Quoting dirktraveller (Reply 17):
is Lion Air trying to pull a direct competition at Air Asia's home base? And how would this affect the competition between these "Major LCCs" in Southeast Asia?

It is interesting, given that JT is the only airline so far that's even had the courage to challenge AK on its home turf, but what I am curious about is how successful this venture will be. Because AK controls 62% of the Malaysian domestic market, it will be interesting to see just how much of the pie JT can get from AK, MH, et al. (Of course, this also begs the question: how is Lion Air perceived in Malaysia?)

However, if this venture is largely seen as domestic in nature, it won't really affect the competition between "major" Southeast Asian LCCs, which are more appropriately defined by their regional footprints. This is why I pointed out that despite being large in Indonesia, Lion Air is a very small player in the greater region, where TR/DG/MI/TZ, 5J and 3K/VF/BL are still larger than JT.

Quoting mandala499 (Reply 21):
1. No restrictions for capital city to capital city flights, including 5th freedom flights.
2. No restrictions for capital city to designated open skies destination in another country, including 5th freedom rights.

If I remember correctly, there are additional restrictions imposed by the Philippines for these two bullet points, which were announced when the Philippines signed on to the agreement. Due to congestion at MNL, the DOTC has designated CRK as the designated airport for Manila under the ASEAN open skies regime (logically as well since the policy has not changed: CRK is still the "successor" airport to MNL). This means that for the purposes of the Agreement, MNL is not designated as an ASEAN open skies destination, and new destinations under this regime will have to use CRK.

Not sure if this is out to protect the local airlines, or if ASEAN-registered airlines that are already flying to MNL are affected by this non-designation, but this does make things very interesting in 2015, with no clear timetable on the part of the Philippine government as to when full ASEAN open skies will take effect.

[Edited 2013-03-20 00:42:05]
 
Thomas_Jaeger
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 8:01 am

Quoting Akiestar (Reply 22):
However, if this venture is largely seen as domestic in nature, it won't really affect the competition between "major" Southeast Asian LCCs, which are more appropriately defined by their regional footprints. This is why I pointed out that despite being large in Indonesia, Lion Air is a very small player in the greater region, where TR/DG/MI/TZ, 5J and 3K/VF/BL are still larger than JT.

Lion's only international routes currently are these:
CGK-JED: daily 744
CGK-KUL: 3x daily 73J
CGK-SIN: 6x daily 73J
CGK-SIN-SGN: 1x daily 73J (included above)
SUB-SIN: 1x daily 73J

Then Wings Air, its fully owned regional subsidiary), flies these routes:
MES-PEN: 15x weekly AT7
PKU-MKZ: 3x weekly AT7
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 11:44 am

Interesting figures Thomas-Jaeger, guess there is a couple of hundred 757s to add to those figures also.
 
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 1:37 pm

Quoting wingman (Reply 14):
So here you have two countries totaling 270M people with some 800? new narrowbodies coming online in the next 10 years.

1. You neglect both airlines have subsidiaries and are expanding in other Asian nations a la LAN in South America.
2. Both airlines have the option to rotate out older planes.
3. As Thomas_Jaeger already noted, that will still put the ratio of narrowbodies to population below the USA's. It is an island nation, driving isn't much of an option.  
Quoting Thomas_Jaeger (Reply 18):
That is 829,268 people per narrowbody.

Which means they passed through a million people per narrowbody just a few years ago (or even last year). They won't be that stationary for long...

And the ratio changes for the US once one adds the previously noted 757s, as well as E-jets and we are the land of the RJ...

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wingman
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 2:40 pm

So there is hope then. And after some more thought I have to agree that in an archipelago/island setting there really is no other "good" option than flying. If they build the infrastructure as Mandala points out I imagine lots of change coming to this part of the world. The only downside will be to see massive development in some of the more remote and beautiful parts. LIke traveling to Koh Samui in 1991 and then going back in 2005. That was shocking.
 
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 9:09 pm

Quoting Akiestar (Reply 20):
ASEAN already has open skies for the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area) region, and the open skies regime for BIMP-EAGA has had a negligible impact. While there are a handful of new routes (ZAM-SDK, for example, is restarting for the fourth time in roughly 15 years), many of the plans for taking advantage of BIMP-EAGA open skies have yet to materialize. For example, AK said it was planning to launch ZAM-BKI and DVO-BKI, but nothing has happened.

If the BIMP-EAGA experience is an indicator of how we will implement open skies in Southeast Asia, I can only imagine how full ASEAN open skies will work.

I don't think BIMP-EAGA is a correct and suitable indicator to relate to the ASEAN open skies. The region covered under BIMP-EAGA is much less developed (I think the biggest airport in the region is BKI which handled 5,848,135 pax in 2012), hence there is less economic attractions for very commercial business entities like AK and JT to venture in. AK for example, is executing a strict route cutting policy which sees what others might see as potential routes like KUL-DAD and KUL-HAK, were being terminated simply because it is not profitable enough for the airline. So just imagine what would their management team thinks of ZAM-SDK and its league. The gold mines of the ASEAN open skies (CGK, BKK, SIN, KUL, MNL, SGN etc) are all located outside the BIMP-EAGA region.

Quoting Akiestar (Reply 22):
I am curious about is how successful this venture will be. Because AK controls 62% of the Malaysian domestic market, it will be interesting to see just how much of the pie JT can get from AK, MH, et al. (Of course, this also begs the question: how is Lion Air perceived in Malaysia?)

Based on FY's short lived jet operation in KUL in 2011 (for about 8 months in total), where the airline got to compete with AK and MH on some of the trunk domestic routes in Malaysia, if I may share this diagram I made for a local forum:

http://i116.photobucket.com/albums/o10/9MMAR/Airliners/2012DomesticShares_zps940daa20.png

They managed to capture 6% of the domestic market share in that year. But if you look at the figures in 2010 and 2011, FY's entry into the market did not effected AK at all as its market share stayed stagnant. A point to note is that FY is MH's subsidiary.

So based on the trend, I think MH could be facing another serious threat to its ever shrinking market share at the home ground. Based on my reading and observation, the Malaysians are enthusiastic about OD.
 
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Gonzalo
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Wed Mar 20, 2013 11:15 pm

Talking about Malindo Air, they are receiving the 7.500th Boeing 737, a 737 900 ER.

From Boeing Media Room :

"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."

http://boeing.mediaroom.com/index.php?s=43&item=2628


Rgds.
G.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
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zkojq
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Fri Mar 22, 2013 9:13 am

Interesting tweet from Tony Fernandes:
https://twitter.com/tonyfernandes/status/314889146462248961
First to fly the 787-9
 
MHG
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Sat Mar 23, 2013 6:06 pm

Quoting Akiestar (Reply 22):
If I remember correctly, there are additional restrictions imposed by the Philippines for these two bullet points, which were announced when the Philippines signed on to the agreement. Due to congestion at MNL, the DOTC has designated CRK as the designated airport for Manila under the ASEAN open skies regime (logically as well since the policy has not changed: CRK is still the "successor" airport to MNL). This means that for the purposes of the Agreement, MNL is not designated as an ASEAN open skies destination, and new destinations under this regime will have to use CRK.

Where I can check which airports are categorized as designated under the ASEAN open skies regime in the Philippines ?
In particular I´d like to know whether CEB is designated as such.

Quoting 9MMAR (Reply 27):
They managed to capture 6% of the domestic market share in that year. But if you look at the figures in 2010 and 2011, FY's entry into the market did not effected AK at all as its market share stayed stagnant. A point to note is that FY is MH's subsidiary.

So based on the trend, I think MH could be facing another serious threat to its ever shrinking market share at the home ground. Based on my reading and observation, the Malaysians are enthusiastic about OD.

This makes me wonder if it was a wise decision by MH to pull the plug on FY´s jet ops.
They had a few B738 only and it was certainly a much too short and limited operation to have an impact on AK´s pax numbers ...
So, those 6% are not too bad considering the limited operations IMHO.
Now Malindo seems to pick up the share (at least they´re trying ...)
Flying is not inherently dangerous but it is very unforgiving in case of carelessness, incapacity or neglect.
 
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Gonzalo
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Sat Mar 23, 2013 7:08 pm

Quoting MHG (Reply 30):
Where I can check which airports are categorized as designated under the ASEAN open skies regime in the Philippines ?

This is the only thing out there in the web... apparently Clark International was "designated" for this privilege...



http://www.clarksubicmarketing.com/n...ws/clark_dmia_asean_open_skies.htm
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
MHG
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Sat Mar 23, 2013 9:56 pm

Quoting Gonzalo (Reply 31):

This is the only thing out there in the web... apparently Clark International was "designated" for this privilege...

That was and still is the problem. I can´t find any source that gives more details.

Can´t really imagine CRK is the only airport to be designated in the Philippines.
If that´s the case it would be a bad joke ...
No airline really want´s to fly to CRK.
Even EK´s new route CRK-DXB is just a desperate action because MNL has no slots availlable for expansion ...
Flying is not inherently dangerous but it is very unforgiving in case of carelessness, incapacity or neglect.
 
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airpearl
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Sun Mar 24, 2013 3:00 am

Quoting MHG (Reply 30):
This makes me wonder if it was a wise decision by MH to pull the plug on FY´s jet ops.
They had a few B738 only and it was certainly a much too short and limited operation to have an impact on AK´s pax numbers ...
So, those 6% are not too bad considering the limited operations IMHO.

FY's jet services were canned precisely because they were eating into AK's passenger loads and profits. That is the inevitable consequence of appointing the CEO of your main competitor as a director in your company. For a short while, Tony Fernandes was an MH director [ahead of an MH-AK equity swap that didn't happen] during which time he fast-tracked the employment in MH of a number of key ex-AK executives whose brief appears to be to destroy anything that could be detrimental to the AirAsia group. Firefly's jet services were the first to be canned. Then MH's Haneda's services were stopped and the rights transferred to AirAsia X. It was also at this time MH dropped its long-standing objection to AirAsia X being granted rights to SYD. Talk about conflict of interest! Tony eventually left MH when the equity swap plan failed - almost by design, as I don't think he had any intention of running a cumbersome national carrier - but the damage was already done.

.
 
MHG
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RE: AirAsia/LionAir: The Upcoming War Of The Industry?

Sun Mar 24, 2013 7:18 am

Quoting airpearl (Reply 33):
FY's jet services were canned precisely because they were eating into AK's passenger loads and profits. That is the inevitable consequence of appointing the CEO of your main competitor as a director in your company. For a short while, Tony Fernandes was an MH director [ahead of an MH-AK equity swap that didn't happen] during which time he fast-tracked the employment in MH of a number of key ex-AK executives whose brief appears to be to destroy anything that could be detrimental to the AirAsia group. Firefly's jet services were the first to be canned. Then MH's Haneda's services were stopped and the rights transferred to AirAsia X. It was also at this time MH dropped its long-standing objection to AirAsia X being granted rights to SYD. Talk about conflict of interest! Tony eventually left MH when the equity swap plan failed - almost by design, as I don't think he had any intention of running a cumbersome national carrier - but the damage was already done.

Thanks for the reminding me of the facts.
I knew about it at the time but this had faded completely from my mind. (see how short living memory is sometimes ...) My first thought then was: How on earth did they (gov/MH) get TF on board this deal against the general public.
Up until then I had a high respect for TF but since ... - I´m not 100% sure if the deal was bound (or even determined) to fail from day one.

So, returning to todays situation I´m very curious how well Malindo will do.
... even more what the reaction of AK and MH will be !
Although OD´s average fares will be more expensive than AK´s I can imagine there´s a considerable market of people willing to fork out slightly more money from their purses to get more (seat-)comfort.
Flying is not inherently dangerous but it is very unforgiving in case of carelessness, incapacity or neglect.

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