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Asian LCCs Expand Fleet Despite The Pitfalls

By Leithen Francis
Source: Aviation Week & Space Technology
December 31, 2012

Leithen Francis Kuala Lumpur 

Asia's leading narrowbody operators will be taking delivery of huge numbers of aircraft next year, even though aircraft financing remains an issue and the global economic outlook continues to be adverse.

Lion Air group plans to receive 24 Boeing 737-900ERs and 12 ATR 72s in 2013, says the group's CEO, Rusdi Kirana. He says in 2014 they plan to receive even more 737s. Industry executives also tell Aviation Week that Rusdi is negotiating with Airbus, with a view to placing an order for A320NEOs. Rusdi, however, declined to comment on this.

AirAsia group, meanwhile, has ordered 100 additional A320-family aircraft, of which 36 are the current model A320 and 64 are A320NEOs. This order is on top of the 200 A320-family aircraft AirAsia ordered in June 2011. AirAsia is based in Malaysia but has affiliate carriers in other countries. The group says it plans to receive 33 A320 aircraft next year. Ten are for AirAsia Malaysia, seven for Thai AirAsia, nine for Indonesia AirAsia, four are for AirAsia Japan and three are for AirAsia Philippines.

Another low-cost carrier that is expanding rapidly is Cebu Pacific Air in Manila. Candice Iyog, vice president of marketing and distribution, says they plan to add seven A320s and two A330-300s next year. The airline's CEO-advisor, Garry Kingshott, told Aviation Week in late August that the airline may place an order for more aircraft. “We've got a large number of deliveries in 2013 and 2014 and it looks like this may be enough, but we will look at the possibility [of getting more],” said Kingshott. This is because the airline's A319s are being retired early and Cebu Pacific may need to respond to Philippine Airlines, which is expanding its fleet in 2013-14, he said.

The accelerated fleet expansion among Asian low-cost carriers is a boon for aircraft makers. Boeing says it delivered its 377th 737 for the year on Dec. 3, making it the highest number of a single commercial family ever delivered by the manufacturer in one year. The year-end figure is likely to be close to 390. Airbus recently increased production of its A320-family aircraft to 42 per month.

Some of Lion's aircraft will be for Malindo Air, a joint venture between Lion and privately owned Malaysian company National Aerospace & Defense Industries. Malindo is based at Kuala Lumpur International Airport and aims to start flying in March, once it secures an air operator certificate. Malindo CEO, Chandran Ramamuthy, says the airline aims to have a fleet of 10-12 aircraft by the end of 2013. These will be 737-900ERs and each will have WiFi and back-of-seat inflight entertainment, he says.

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