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Australia-Bali airline market: Lion's Malindo expands. AirAsia X next?

Competition is intensifying in the Australia-Bali market as Malaysia’s Malindo Air launches services in 2Q2019 from Adelaide and Sydney to Bali, using fifth freedom rights. Virgin Australia is also launching services from Darwin to Bali in Apr-2019, and Qantas is adding capacity from Sydney to Bali by upgauging to A330s.

Malindo already competes on the Melbourne-Bali and Brisbane-Bali routes and its Indonesia-based sister airline Batik Air serves Perth-Bali. With the launch of Adelaide and Sydney the Lion Group will therefore compete on the five largest Australia-Bali routes. 

Malaysia’s AirAsia X is also now considering the launch of services from Bali to Australia using fifth freedom rights, taking a page from the strategy playbook of rival Malindo. However, AirAsia X will have to settle on a limited number of frequencies or wait for Malaysia to negotiate an expanded air services agreement with Indonesia, since the current bilateral caps the number of fifth freedom Bali-Australia weekly frequencies to 28.  

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