Lion Air plans to launch full service operations in 2013 through its Batik Air division, according to a report in The Jakarta Post. Lion Air’s general affairs director Edward Sirait said, “our economic condition remains healthy and the demand for full-service flights is increasing. We want to tap this opportunity and Batik Air will start its operations in March 2013”. Lion Air is currently processing its flight permit (SIUAU) with the Indonesian Transportation Ministry, after which it would then process its Air Operator’s Certificate (AOC). The carrier will operate 10 Boeing 737-900s, focusing on international services to Southeast Asia, East Asia and Australia. Mr Sirait said he is confident the airline will be able to compete with Garuda Indonesia and Pacific Royale.
Lion Air to launch full service operations in 2013
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Australia is well positioned to benefit from Indonesia’s booming economy as its growing middle class starts to have the income and desire to holiday overseas. The geographic proximity of the two countries means several routes are within the range of narrowbody aircraft, opening up a huge range of new options for LCCs and full-service carriers from both countries.
This is the third report in a series of reports on the Asia-Australia aviation market. The first report looked at the Malaysia-Australia market and the rapid growth of AirAsia X. The second report looked at the Philippines-Australia market and bilateral limitations which are blocking the launch of services from Cebu Pacific. This report looks at the larger Indonesia-Australia market, which has seen significant growth this year and has potential for continued rapid growth over the medium to long-term.
Merpati Nusantara Airlines faces crisis. Should the Indonesia government pull the plug?
Indonesia’s Merpati Nusantara Airlines is facing a financial crisis and is looking to recapitalise and restructure its network to survive. The government-owned carrier has already shrunk in recent years while all its competitors and Indonesia’s overall domestic market have expanded rapidly. But Merpati has held onto some trunk routes, where it competes against larger and stronger carriers.
The most logical solution is for Merpati to abandon competing against Indonesia’s main carriers and focus entirely on regional routes to remote areas. But the number of regional routes requiring government subsidy are declining.
More efficient Lion Air has a fast-growing regional subsidiary operating ATR 72s and is looking to add smaller turboprops to access an even larger chunk of Indonesia’s vast regional market. Garuda is also introducing ATR 72s in Nov-2013, leaving even less room for a government-backed regional carrier. The Indonesian government seems to recognise there is no longer a need to keep Merpati running.