JAKARTA : Lion Air, Indonesia's giant airline group, is set to launch its Thai subsidiary carrier just before the year-end in a move that may impact Thailand's aviation landscape.
Spreading wings to Thailand: Lion Air Group chief executive Rusdi Kirana with a model of Boeing 737NG at his office in Jakarta last Thursday.
Thai Lion Air (TLA) will make its presence known with a bold plan for fleet and network expansion that could see Thailand's newest registered carrier deploy up to 50 jets in five years.
TLA's growth plan includes its core budget short-haul services but also the launch of full-service flights to farther flung Asian destinations using the Boeing 787 "Dreamliner" wide-body jets.
The powerful Indonesian entrant is expected to shake up the budget airline segment in Thailand, now dominated by Thai AirAsia, particularly using fare wars.
Rusdi Kirana, the co-founder and chief executive of Lion Air Group, saw the arrival of its first aircraft on Friday in Bangkok as it nears final regulatory clearance from Thailand's Department of Civil Aviation.
TLA will commence its no-frills services with two new Boeing 737-900ERs, offering a 215-seat all-economy class configuration, around the last week of December.
It aims for 12 of these planes in its fleet by the end of next year, before ramping up to 50 in five years.
Its first route will be Bangkok to Jakarta twice daily, along with a daily flight from Bangkok to Kuala Lumpur and a thrice daily Bangkok-Chiang Mai service.
Next year, the airline intends to link Bangkok with China and India, specifically with Guangzhou, Hong Kong, Shenzhen, Delhi and Mumbai.
On the domestic front, TLA aims to cover key Thai destinations like Phuket, Hat Yai, Krabi and Phitsanulok from its base at Bangkok's Don Mueang Airport.
But Mr Rusdi insisted TLA's focus is not serving Thai domestic routes point-to-point, but rather feeding passengers from Indonesia and other Southeast Asian countries to its Thai domestic network.
The mustached Indonesian tycoon played down the general perception that Lion Air Group are in the market to crush other operators with low fares.
"Our business philosophy is passenger-centric. We are not here to race against other airlines," said Mr Rusdi, 50.
He added the open skies policy suggested by the Asean Economic Community (AEC) for 2015 and Asia's growing airline market offer sizable airline opportunities for more flights and new players.
TLA is tentatively planning for full-service medium-haul flights in 2016, from Bangkok to Beijing, Tokyo and Incheon on Boeing 787-8 wide-body jets. The airline will acquire the planes from Lion Air, said Mr Rusdi.
He said the main challenge is for TLA to explain the differences between a wide-body full-service flight and a low-cost carrier (LCC) for budget air travellers.
He is upbeat about TLA making a profit in its first year of operation, if not sooner.
Its main marketing strategy will be to bundle its air tickets with package tours, rather than individual ticket sales used by most LCCs, he said.
TLA is 49% owned by Lion Air and 51% by a couple of Thai travel-related companies whose names were not disclosed, though TLA executives insisted they are not politically related.
By launching services to Jakarta and Kuala Lumpur, TLA will be able to connect to Lion Group's affiliate in Malaysia, Malindo Air, and to subsidiaries Lion Air and Wings Air, which together serve 76 destinations in Indonesia. This connects the Thai capital to every major city and town in Indonesia with one-stop service via Jakarta, said TLA chief executive Capt Darsito Hendro Seputro.
Latest stories in this category:
- Airline passenger growth to reach 3.9bn
- THAI brings Smile to Luang Prabang
- Airline's pay-by-weight fares take off
- Kan Air eyes four jets for Koh Phangan
- Beijing's anti-scam law crimping China arrivals
- Merger creates world's biggest airline
- Upstart Malindo Air adds India to fast-growing network
- Travellers urged to leave early