- CAPA Analysis
- Schedule Analysis
- Route Maps
- Fast Fact Report
- IATA Code
- Date established
- Corporate Address
- N1, Level 4, Airlines Office
Main Terminal Building
Kuala Lumpur International Airport
64000, Sepang, Selangor Darul Ehsan
- Main hub
- Kuala Lumpur International Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Airline Group
- Part of Lion Group
Malindo Air is an LCC formed as a joint venture between Malaysia's National Aerospace and Defence Industries (NADI) (51%) and Lion Air of Indonesia (49%). The carrier launched in mid Mar-2013 starting with domestic services and plans to launch a number of international routes to India and Bangladesh in future. The carrier operates a fleet of Boeing 737-900ER and ATR72-212 aircraft from its Kuala Lumpur hubs.
Location of Malindo Air main hub (Kuala Lumpur International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Malindo Air 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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34 total articles
Malaysia Airlines' restructuring enters new phase with fleet & possible regional capacity reductions
Malaysia Airlines (MAS) has begun a new phase of its long restructuring process, as it starts to reject aircraft leases. MAS transitioned to a new company on 1-Sep-2015, but the restructuring in many respects is far from complete, and will take another year to implement.
MAS still has the flexibility to reject aircraft leases, giving it a benefit similar to US airlines that are restructuring through bankruptcy protection. While MAS cut capacity and head count prior to the transition to the new company, the flag carrier has only begun the process of reviewing its fleet.
A large portion of the fleet is expected to be returned over the next several months. More capacity cuts are possible, particularly in the domestic and short haul sectors, as MAS has already cut back its network outside Asia to a minimum level.
Malaysia Airlines (MAS) is cutting international seat capacity by about 18% in Aug-2015 as the ailing flag carrier restructures its network ahead of the 1-Sep-2015 transition to a new company. International ASKs are being reduced by about 23% as the medium and long haul networks have seen bigger reductions than operations within Asia with the new MAS seeking to leverage its strong regional position.
Australia accounts for about 30% the seats and about 40% of the ASKs being removed from the MAS international network in Aug-2015. Europe accounts for about 10% of the seats and 20% of the ASKs being removed in Aug-2015 but the cuts to Europe are much steeper when also factoring in the May-2015 suspension of services to Frankfurt.
In Sep-2015 MAS will for the first time have a fewer international ASKs than the AirAsia/AirAsia X groups. AirAsia’s short-haul Malaysian subsidiary will also overtake MAS as Malaysia’s largest international carrier on a seat basis. On a group level AirAsia already has more international seats in Malaysia and has been the domestic leader for several years.
Thai Lion resumes international expansion with Singapore, increasing Lion Group’s presence at Changi
Indonesia-based Lion Group affiliate Thai Lion is making another move into international operations by launching service to Singapore on 15-Aug-2015. Bangkok-Singapore becomes Thai Lion’s first international route since it dropped services to Indonesia in early 2015. Thai Lion also dropped services to Malaysia in 2014.
Bangkok-Singapore is an extremely competitive route that is already well served by four LCC groups – AirAsia, Jetstar, Scoot and Tigerair. Lion Group’s entrance could be seen as a strategic move as it will give Lion a presence on all three of the largest routes from Singapore.
Lion Group’s share of Singapore’s LCC market will reach 8% in Aug-2015. Lion is still much smaller in Singapore than its rival Southeast Asian LCC groups but it is closing the gap as it expands at a time others have been reducing capacity.
Malaysia AirAsia (MAA) and sister long-haul LCC Malaysia AirAsia X (MAAX) are shrinking their fleets in 2015 while adopting a new capacity and pricing strategy. Both carriers are trying to restore yields, which plummeted in late 2013 and 2014 due to intense competition and overcapacity in the Malaysian market.
MAA is still adding some capacity by improving aircraft utilisation levels. But passenger numbers will likely remain flat as the focus on yields results in a reduction in load factor.
Meanwhile MAAX has cut capacity across its scheduled network as part of a restructuring aimed at restoring profitability. MAAX was highly unprofitable in 2014 while MAA was the only profitable airline in Malaysia. MAA was also the only profitable airline among the eight carriers in the AirAsia/AirAsia X portfolio.
Passenger traffic growth slowed significantly in 2014 as Malaysia’s airline sector adjusted fleet and capacity plans in response to challenging market conditions. Passenger numbers grew less than 5% in 2014 and growth is expected to again be in the low single digits in 2015 as further adjustments are implemented, including anticipated capacity cuts at Malaysia Airlines (MAS).
Medium/long-haul low-cost carrier Malaysia AirAsia X is also cutting capacity in 2015 as part of its own restructuring. Both Malaysia AirAsia X and short-haul sister carrier Malaysia AirAsia are reducing their fleets in 2015 although the latter will still pursue modest capacity growth by improving aircraft utilisation. Lion Group’s Malaysian affiliate Malindo Air is still expanding rapidly but on a much smaller base.
This is the first instalment in a report on the Malaysian market and the outlook for 2015. This part will focus on MAS and the recent reduction in passenger numbers in Malaysia. The second part will focus on AirAsia and AirAsia X.
Malaysia Airlines (MAS) continues to incur large losses as the flag carrier tries to rebuild confidence in the aftermath of the MH370 and MH17 incidences. Yields remain at unsustainable levels due to the combination of challenging market conditions and the lingering impact of MH370 and MH17.
MAS has not yet cut capacity and is instead focusing on trying to woo passengers through promotional fares. While the flag carrier has completed several initial milestones from the recovery plan initially outlined in late Aug-2014 it will take several more months for the main components of the plan to be implemented.
Bigger changes are inevitable starting in 2H2015. But adjustments to capacity levels and the carrier’s fleet could be smaller than anticipated.