- CAPA Analysis
- Schedule Analysis
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- 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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31 total articles
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.
AirAsia X joins AirAsia in slowing expansion in challenging Malaysia market; cuts Australia capacity
AirAsia X has joined sister low-cost group AirAsia in slowing its expansion in the Malaysian market by selling aircraft, deferring deliveries and wet-leasing excess capacity. The two Malaysian subsidiaries of the AirAsia/AirAsia X groups combined now only plan to add one aircraft, an A320, in 2015.
The adjustments should help drive improvements in yields and profitability. AirAsia X incurred a loss for the fourth consecutive quarter in the 3Q2014 while AirAsia saw its profits slip again - although remaining among the most profitable in the region.
AirAsia and AirAsia X are wisely not holding out for a restructuring at rival Malaysia Airlines (MAS), which at least for the time being is not pursuing any significant reductions to capacity. AirAsia X, which recorded 42% ASK growth in the first three quarters of 2014, will now only increase ASKs in the Malaysian market by 5% in 2015.
Malaysia’s Malindo Air further expands domestic and Indonesia networks, pressuring Firefly & AirAsia
Malaysian hybrid carrier Malindo Air is doubling its Indonesian network during 4Q2014 with three new routes that leverage its relationship with 49% shareholder Lion Group. Malindo recently launched services to Medan - its fourth destination in Indonesia after Jakarta, Bali and Batam - and will add Pekanbaru in Nov-2014 followed by Bandung in Dec-2014.
Malindo is also expanding its domestic network and will soon serve more airports in peninsular or west Malaysia, 12, than any other carrier. Malindo recently added Ipoh as its 10th destination in peninsular Malaysia and will launch services at Malacca and Kerteh in Nov-2014.
Kerteh will become Malindo’s ninth domestic route from its fast growing turboprop base at Kuala Lumpur Subang. In comparison Malaysia Airlines (MAS) regional subsidiary Firefly currently operates seven domestic routes from Subang although it has a bigger international network and is still the leading airline overall at Subang.
Lion Group Malaysian affiliate Malindo Air is planning to launch services on 3-Nov-2014 to Singapore, which will become the hybrid carrier’s 10th international destination from Kuala Lumpur International Airport (KLIA). Malindo will be the fourth LCC on the KLIA-Singapore route, which will become the largest international LCC route in the world based on seat capacity.
Lion will join Asia’s other three main LCC groups – AirAsia, Jetstar and Tigerair – in competing in the busy Singapore-Kuala Lumpur market. While Malindo may find the local market challenging, particularly from a Singapore point of sales perspective given its unfamiliar brand, the carrier will also offer connections passengers beyond Kuala Lumpur with a focus on South Asia.
Kuala Lumpur-Singapore will be Malindo’s first destination with 162-seat 737-800s. Malindo is taking two 737-800s in 4Q2014, supplementing its existing jet fleet of six 180-seat 737-900ERs. The 737-800s will also be used to launch service to Bandung in Indonesia and to add a second daily flight to Bangkok.