- CAPA Analysis
- Schedule Analysis
- Cargo Analysis
- Route Maps
- Fast Fact Report
- Airline Status
- IATA Code
- ICAO Code
- Main hub
- Jakarta Soekarno-Hatta International Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Airline Group
- Part of AirAsia Group
- Frequent Flyer Programme
- Association Membership
- Indonesian National Air Carriers Association (INACA)
Indonesia AirAsia is a low cost carrier based at Jakarta Soekarno-Hatta International Airport. The airline is a JV between Malaysian LCC AirAsia (49%) and PT Fersindo Nusaperkasa (51%). Indonesia AirAsia operates a fleet of Airbus A320 aircraft both domestically and internationally to destinations in South East Asia and Australia.
Location of Indonesia AirAsia main hub (Jakarta Soekarno-Hatta International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Indonesia AirAsia fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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AirAsia has joined other leading LCC groups in Southeast Asia by deciding to add higher density narrowbody aircraft. The 100 A321neos ordered by AirAsia at the 2016 Farnborough Air Show will enable the group to maximise slots at infrastructure constrained airports and further reduce unit costs.
The new order also enables the AirAsia Group to meet a requirement for additional aircraft that has surfaced due to the establishment of a leasing subsidiary which is looking at potentially placing some of the group’s future aircraft with third party customers. AirAsia joins rival Lion Group and VietJet Air in pursuing potential opportunities to lease out some of 1,150 aircraft the three Southeast Asian groups have on order – a staggering number of aircraft that likely cannot be absorbed entirely by their own airline subsidiaries or affiliates - but which they need to have available in case high forecasts materialise.
The new deal lifts AirAsia’s narrowbody order book to 404 aircraft, including 304 A320neos to be delivered from 2H2016 through 2028 and 100 A321neos slated for delivery from 2019 to 2028. The group took its last A320ceo in 2Q2015 and currently operates 171 of the type from bases in five countries.
Competition could again intensify on Australia-Bali routes, despite the upcoming withdrawal of AirAsia X. The long haul low cost group drove 7% growth in the Australia-Bali market in 2015 but is suspending services to Bali from Melbourne and Sydney at the end of Aug-2016.
The Lion Group and Turkish Airlines are both looking to launch services between Bali and Australia, which could potentially fill the void left by AirAsia X in the Bali to Melbourne and Sydney markets. The Lion Group could also fill the void in the Bali-Brisbane market left by Garuda Indonesia, which suspended services to Brisbane in early 2015.
The Australia-Bali market has grown steadily and nearly quadrupled in size over the last decade. However competition is intense, making it difficult for any new entrant – as AirAsia X discovered.
AirAsia is slowing expansion as it attempts to turn around struggling affiliates and restore profitability. Six of the eight AirAsia-branded carriers were unprofitable in 1H2015 with only the long established short-haul carriers in Malaysia and Thailand in the black.
Passenger traffic across the AirAsia family grew by only 6% in 1H2015 to 26.5 million. 2015 will almost certainly see the slowest annual traffic growth in AirAsia’s 14-year history.
2015 will also mark the first year AirAsia will shrink its fleet. AirAsia now plans to end 2015 with 193 aircraft, including 166 A320s and 27 A330-300s, compared to 197 aircraft at the beginning of the year. Extremely modest growth is now planned for the next three years, resulting in a fleet of 208 aircraft (177 A320s and 31 A330s) at the end of 2018.
Lion Group full-service subsidiary Batik Air has entered the international market with a new double daily service to Singapore. Batik becomes the eighth airline operating Jakarta-Singapore and supplements the seven daily flights already operated by sister LCC Lion Air in the world’s second largest international route.
The launch of Singapore is part of a major expansion for Batik in 2015 as the airline nearly doubles its fleet to 34 aircraft. Lion has been allocating most of its narrowbody deliveries this year to Batik and Thai Lion Air while growth at the main Lion Air brand has slowed significantly.
The new route is also part of a major push in Singapore for the Lion Group. Thai Lion Air at almost the same time is launching service to Singapore, which will become the first destination to be served by all four of the main Lion Group carriers.
AirAsia has signed up as the anchor tenant for Changi Airport’s T4, a new hybrid terminal which is slated to open in 2017. AirAsia expects to reduce its operating costs significantly in Singapore as it moves from T1 to T4, giving it a better foundation to allow it potentially to resume expansion in Singapore.
AirAsia grew rapidly in Singapore from 2008 through 2013 but cut capacity in 2014 as market conditions became extremely challenging. Lower operating costs, driven by automation of passenger services, and incentive packages should make it easier for AirAsia to add capacity on some of its 15 existing routes from Singapore and launch new routes.
AirAsia could also potentially use T4 as a transit hub by introducing its Fly-Thru product in the Singapore market. Although it is not a hub or base Changi is AirAsia’s third largest airport. Only Kuala Lumpur and Bangkok have more AirAsia seats than Singapore.
Indonesia AirAsia (IAA) is planning further capacity and network adjustments as part of turnaround efforts. IAA is shrinking its fleet but should be able to reduce unit costs as aircraft utilisation rates increase and cost reduction initiatives are implemented.
Despite its recent struggles IAA remains an important component of the AirAsia Group group’s long-term strategy, particularly its international operation. The affiliate is also needed to feed new long-haul low-cost carrier Indonesia AirAsia X (IAAX).
IAA is expected to increase its focus on international operations, a sensible move given the challenges it has faced in Indonesia’s highly competitive domestic market. AirAsia can afford to live without being a significant player in the Indonesian domestic market and should instead try to leverage its leading position in the country’s relatively small but promising international market.