Established in 2003, Wings Air is an Indonesian regional airline based at Jakarta's Soekarno-Hatta International Airport. A wholly owned subsidiary of Lion Air, Wings Air operates scheduled regional service on thinner routes across the country, codesharing with its parent.
Location of Wings Air main hub (Surabaya Juanda Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Wings 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.
49 total articles
14 total articles
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.
Lion Air Group is planning further expansion at its Batam hub with several new domestic routes by early 2014 followed by the launch of international services by the end of 2014. Flights to Bangkok, Guangzhou, Hong Kong, Kuala Lumpur and Jeddah are part of an ambitious plan by Lion to position Batam as its major Indonesian hub for domestic to international connections.
Batam, an Indonesian island located close to Singapore, has quietly emerged as a Lion domestic hub with 13 routes and a large volume of transit passengers. Batam is currently the ninth largest hub or base for Lion but the island’s Hang Nadim Airport, which will also host a new Lion maintenance base, could become the group’s largest transit hub.
Lion is keen to position Batam as an alternative transit point to congested Jakarta. The group is also planning to acquire a ferry to shuttle passengers between Batam and Singapore, avoiding the congestion and higher cost of Changi Airport.
Indonesia’s emergence as one of the largest and fastest growing markets in Asia will be reinforced over the next couple of months as Garuda and Lion Air surpass Singapore Airlines (SIA) to become the largest carriers in Southeast Asia based on fleet size. As groups, Garuda and Lion will also end 2013 with more aircraft than the SIA Group and the AirAsia Group.
Garuda took delivery of its 100th aircraft in late Aug-2013 while Lion plans to take delivery of its 100th aircraft in late 2013. Currently only one airline in Southeast Asia, Singapore Airlines (SIA), has over 100 in service aircraft. But SIA’s fleet, which currently stands at 102 aircraft, will shrink to 101 aircraft over the next few months while Garuda and Lion will continue to rapidly expand.
Reaching the 100-aircraft milestone is a significant achievement for both Garuda and Lion. The other major flag carriers in the region, Malaysia Airlines (MAS) and Thai Airways, also currently operate over 90 aircraft.
Lion Air Group’s Malaysian affiliate Malindo Air plans to pursue rapid international expansion with several routes to be launched to Indonesia and India shortly after Dhaka in Bangladesh becomes its first international destination on 28-Aug-2013. Malindo could quickly become the largest international carrier in the Lion Group as Kuala Lumpur is positioned as a transit hub for international connections.
Malindo launched services at the end of Mar-2013 and currently operates 11 domestic routes. But Malindo will now turn its attention to Malaysia’s international market, where it sees more opportunities.
Malindo will also start to leverage network synergies with its Indonesia-based sister carriers. Malindo and Lion’s three Indonesian subsidiaries will offer joint itineraries on hundreds of city pairs connecting Indonesia, where the group serves about 50 destinations, with Malaysia and South Asia. Malindo is particularly keen at tapping the under-served Indonesia-India market.
The Kuala Namu International Airport outside Medan opened on 25-Jul-2013, becoming the least congested major airport in Indonesia. Medan currently only has six international routes and is served by only six foreign carriers, five of which come from nearby Malaysia and Singapore. But Kuala Namu has the potential of becoming a major international hub in response to growing demand from the local market, which has a catchment area of over 10 million people, and from transit traffic as infrastructure constraints at Indonesia’s other major airports worsen.
Garuda Indonesia, which opened a domestic hub in Medan earlier this year, has postponed international expansion from the airport. But Garuda will inevitably relook at opening international routes at Medan and using it as an alternative to Jakarta for domestic-to-international and even international-to-international connections.
Meanwhile, other Indonesian and foreign carriers will take advantage of a rarity in Indonesia – a spacious airport that is not operating above capacity. LCCs, which already account for over 70% of domestic and international capacity at the new airport, are particularly well positioned given that Medan does not have the business traffic profile of Jakarta.
Lion Air has embarked on the first phase of an aggressive international strategy which is starting to see the fast-growing airline group diversify away from its roots in the Indonesian domestic market. The Mar-2013 launch of an affiliate in Malaysia, Malindo Air, is expected to be followed by joint ventures in other Asian markets, starting with Thailand. A low cost, but hybrid operator, Lion over time will also look to grow its now tiny international network from its home market of Indonesia.
Internationalisation with a focus on Southeast Asia is the right strategy for Lion as it cannot continue to rely almost entirely on the Indonesian domestic market. Indonesia has emerged as one of the world’s largest and fastest growing emerging markets. But with nearly 600 aircraft on order Lion needs to hedge its bets and not limit its growth to Indonesia, particularly given the threat that growing infrastructure constraints could lead to slower growth over the medium to long-term.
Lion, however, faces huge challenges as it starts to dip its paw in other markets. Establishing a strong brand and distribution network outside Indonesia will be Lion's biggest challenge. Competition in any new market Lion enters will be fierce as it will not have the first low cost mover advantage it had in Indonesia. Pan-Asian low cost airline groups like AirAsia, Jetstar and, to a lesser extent, Tiger, already occupy the high ground.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.