Lion Air to launch budget airline in Malaysia

The Indonesian low cost airline will challenge AirAsia and will start regional flights in May.

KUALA LUMPUR:  Indonesia’s PT Lion Mentari Airlines announced today it will launch with Malaysian firm NADI a new low-cost airline, which will challenge Malaysia-based budget carrier AirAsia.

The new Malindo Airways will start regional flights by May next year with a fleet of 12 Boeing 737s, said Indonesia’s largest privately run airline, which operates as Lion Air, and Malaysia’s National Aerospace and Defence Industries (NADI).

Lion Air president Rusdi Kirana said the companies were counting on an increase in travel with the Asia-Pacific region expected to have 2.2 billion passengers in 2030 and need 11,450 new airplanes to meet the demand.

NADI, which specialises in maintenance, repair and overhaul services, will own 51% of the joint venture. Lion Air will supply the fleet, based out of Kuala Lumpur International Airport.

“We are giving affordable prices but with better services” than other budget airlines, such as in-flight entertainment, Kirana told reporters before the joint venture signing ceremony.

The airline plans to initially fly to destinations across Indonesia, as well as Manila, Hanoi and cities in Australia and China.

Over the next decade it hopes to expand its fleet to 100 planes, including five flagship 787 Dreamliners to arrive in 2015, when Malindo plans to fly to Europe.

Indonesia’s fast-growing Lion Air early this year sealed a record US$22.4 billion deal for 230 Boeing jets. The first aircraft will be delivered in 2017, and the deliveries will run up until 2026.

It has also ordered 27 smaller aircraft from European manufacturer ATR.

The new ATR 72-600 turboprop planes, worth US$610.0 million, are scheduled to arrive by the end of 2015 and would see the group become the largest operator of ATR aircraft in the world, with a total fleet of 60 planes.

-AFP