- CAPA Analysis
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- 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 Air 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.
158 total articles
Malindo interested in Coimbatore, Indian Gvt requested to include city in international aviation ags
24 total articles
AirAsia has reported a drop in profits at its Malaysian short-haul subsidiary for 2Q2014 while its affiliates in India, Indonesia, Philippines and Thailand were all in the red. But Asia’s leading LCC group is confident market conditions are improving, leading to improved results in 2H2014 and 2015.
The outlook in Malaysia should particularly improve as AirAsia is in a position to benefit from the upcoming restructuring at Malaysia Airlines (MAS). AirAsia has seen profits slide over the past year due to rapid capacity expansion at MAS and Lion Air Group’s new Malaysian affiliate Malindo Air, pressuring yields.
Malaysia AirAsia has responded by slowing down expansion, increasing ASKs by a paltry 3% in 1H2014 despite having a much larger fleet than one year ago. Anticipated capacity cuts at MAS as it restructures could enable AirAsia to reaccelerate growth and restore aircraft utilisation rates to more normal AirAsia levels.
Lion Air Group Malaysian affiliate Malindo Air is planning to add capacity to India and Thailand in 4Q2014 as part of the next phase of its international expansion. Services to North Asia including mainland China are expected to be launched in 2015 as part of a subsequent phase.
Malindo has been focusing on Bangladesh, India and Indonesia since it launched international services just under a year ago. Malindo also now serves Bangkok in Thailand.
Malindo so far this year has concentrated on domestic turboprop expansion but will resume growing its international operation in 4Q2014 as it adds two 737-900ERs. The two aircraft will be Malindo’s first additional jets in over a year and will likely be followed by faster expansion of the 737 fleet in 2015. This is the second of a two part report on Lion Group's Malindo.
Lion Air Group Malaysian affiliate Malindo Air is focusing expansion in 2014 on its turboprop operation in response to opportunities on short routes within Malaysia. Malindo added five ATR 72-600s in 1H2014 and is taking another five in 2H2014, giving it a fleet of 13 ATR 72s but only eight 737-900ERs.
The heavy reliance on turboprops was not expected but enables Malindo to serve routes that are under the radar screen of all-A320 operator AirAsia. Malindo is instead competing mainly with Malaysia Airlines regional subsidiary Firefly as it has focused most of its expansion so far this year at Kuala Lumpur’s second airport Subang.
Malindo is planning to open by the end of 2014 a second turboprop base at Penang and is also looking at potentially opening bases in the east Malaysian cities of Kota Kinabalu and Kuching. The new bases will support several new routes, some of which are completely unserved.
Lion Air Group’s pace of expansion is about to accelerate as it takes delivery of its first A320 and increases its 737 delivery rate. The group plans to add over 30 aircraft in 2H2014 as it increases its overall average monthly intake from three to five aircraft – a rate it will maintain in 2015, resulting in a staggering 60 deliveries next year.
At the same time AirAsia Group is slowing its fleet expansion, particularly in the Southeast Asia market. AirAsia is growing its Southeast Asian fleet by only six aircraft in 2H2014 and may not add any aircraft in 2015 as the focus will be on spooling up new affiliates in India and Japan.
If Lion does not follow AirAsia in slowing down growth in Southeast Asia it will quickly shoot past AirAsia. There is a risk market share gains will come at the expense of yields and profitability as several Southeast Asian markets are already suffering from overcapacity - but there is a larger strategic game being played out now.
Short-haul LCC group AirAsia has reported a sharp drop in profits for 1Q2014, including for its original subsidiary in Malaysia. Long-haul sister group AirAsia X meanwhile swung to a loss in 1Q2014 despite strong traffic growth and load factor improvement as yields in the Malaysian market deteriorated.
AirAsia has made another downward adjustment to its fleet plan, removing six aircraft from its 2014 fleet through aircraft sales. This brings the total reductions for 2014 to 19 aircraft when including the six sales and seven deferrals announced in Feb-2014. The group also expects to defer another seven aircraft in 2015, adding to the 12 deferrals announced earlier and leaving it with a mere 10 deliveries next year.
The new adjustments, which also include deferrals for 2016 to 2018, are understandable given the challenging market conditions. But they may prove to be a step too far, particularly if the pending restructuring at Malaysia Airlines (MAS) proves to be significant, providing AirAsia an opportunity to accelerate growth and improve yields in its home market.
As Kuala Lumpur's rapid LCC-driven traffic expands, AirAsia has unveiled plans for further expansion at Senai International Airport in the southern Malaysian state of Johor, just across the Causeway from neighbouring Singapore. The LCC group plans to add three international routes from Senai in Jun-2014, giving it six international routes, including five to Indonesia. AirAsia also recently launched its eighth domestic route at Senai.
Senai was the fastest growing airport in Malaysia in 2013 and one of the fastest-growing in Asia, with 44% growth, but off a low base, to 2 million passengers. Senai traffic grew by another 36% in 1Q2014 to 550,000 passengers. AirAsia, which currently accounts for about two thirds of total capacity at Senai, has been the main driver.
While Johor has its own fast-growing market, driven by rapid economic development in the state, it offers competition to some extent with nearby Singapore. The three new international routes at Senai for AirAsia, including two to Indonesia and one to Vietnam, come as the LCC group once again faces roadblocks in expanding its Singapore-Indonesia operation.