Joint Ventures Spur Expansion For Asia-Pacific LCCs

By Adrian Schofield
Source: Aviation Week & Space Technology

Lion sees great potential in Thailand, the Lion spokesman says. It has a very large domestic market, and there is strong untapped demand for leisure and business international travel between Bangkok and other cities in the Asean bloc.

Meanwhile, Lion is also expanding Malindo Air. The joint venture, which was launched in March, has recently announced that it will begin its first international flights—between Kuala Lumpur and Dhaka, Bangladesh's capital—starting Aug. 28. The carrier says it also intends to launch flights from Kuala Lumpur to the Indonesian destinations of Bali, Jakarta, Medan and Batam.

Malindo has a fleet of three ATR 72-600s and four Boeing 737-900ERs. It is expected to receive one more ATR 72 and two 737s this year, giving it 10 aircraft.

The Tigerair group does not have the same level of orders as the other LCCs, although it does have joint-venture franchises in Australia, Indonesia and the Philippines, as well as its core Singapore-based operation.

The group is scheduled to receive 10 Airbus A320s during the fiscal year through March 2014, with half going to the Singapore carrier and the remainder to the Tigerair joint ventures. Of these five, two have been delivered to the Indonesian carrier Tigerair Mandala, two will go to Tigerair Australia and one remains unassigned, an airline spokeswoman says.

Tigerair's Australian operation currently has 11 aircraft, Mandala has nine, and the Philippines carrier has five. Beyond the 10 being delivered during this fiscal year, another 15 A320s are on the orderbook, due to be delivered by December 2015. While it has previously said it wants to expand its footprint in Asia, for now Tigerair is “focused on growing our existing joint ventures,” the spokeswoman says.

Tigerair Australia CEO Rob Sharp says the airline needs to double the size of its fleet of 11 A320s to achieve the efficiencies that are expected from a low-cost carrier.

Virgin Australia bought a 60% share in Tigerair Australia earlier this year, with the Singapore-based Tigerair parent owning the remainder. Virgin Australia has stated that the Tigerair Australia fleet is expected to grow to 35 by 2018. At least in the near term, its new aircraft are from the Tigerair group orderbook.

So far, Tigerair Australia has no plans to serve short-haul international destinations with its own aircraft, Sharp says. While he would “never say never” regarding international service, it is concentrating on the domestic network at the moment.


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