Indonesia AirAsia

Tiger-backed Mandala resumes operations with focus on Indonesia’s largest routes

Indonesia’s Mandala Airlines has resumed operations and emerged from bankruptcy as a new affiliate of Asian LCC group Tiger Airways. Mandala’s first flight in 15 months operates today (05-Apr-2012) on one of Indonesia’s largest domestic routes, Jakarta-Medan. But the new Mandala, which only operated domestic services before its Jan-2011 grounding, will focus primarily on international routes starting with Medan-Singapore and Jakarta-Kuala Lumpur.

Mandala last week announced Jakarta-Medan and Jakarta-Kuala Lumpur as its first two routes as a Tiger partner carrier, with flights commencing on 05-Apr-2012 and 04-May-2012, respectively. But Tiger’s booking engine indicates that Mandala will start operating international flights earlier - on 20-Apr-2012 with one daily frequency on the Medan-Singapore route. More routes, primarily international but also some domestic, are expected to be added over the next few months as Mandala rapidly spools up its fleet of Tiger-sourced Airbus A320s.

Bullish AirAsia reports 2011 profit and accelerates expansion

AirAsia has posted another year of profits across all three of its short-haul operations as the group continues to outperform nearly every low-cost and full-service carrier in Southeast Asia. AirAsia Group’s outlook for 2012 is again bright despite high fuel prices and challenging economic conditions. With IPOs planned for its Indonesian and Thai affiliates plus the launch of two new affiliates in the Philippines and Japan, 2012 promises to be another big year for AirAsia. Another milestone will also be reached this year as the group’s all-Airbus A320 fleet surpasses 100 aircraft.

AirAsia Malaysia, Thai AirAsia and Indonesia AirAsia all ended 2011 in the black from both an operating and net perspective. The Malaysian carrier posted “core net income” of MYR881 million (USD291 million), an increase of 18% from 2010, as revenues increased 13% to MYR4.47 billion (USD1.48 billion). Thai AirAsia turned a core net profit of THB1.909 billion (USD623 million), an increase of 14%, as revenues surged 33% to THB15.87 billion (USD520 million). Indonesia AirAsia recorded a core net profit of IDR149.654 billion (USD17 million), which represented a 53% drop compared to 2010 as revenues soared by 34% to IDR3.705 trillion (USD411 million) (see Background information).

Singapore Airshow 2012: Garuda Indonesia, Citilink and Lion accelerate fleet expansion

Indonesia’s two largest airline groups, Garuda Indonesia and Lion Air, are further accelerating the expansion of their fleets as they look to capitalise on their leading positions in one of the world’s biggest emerging markets.

The two groups – which include Garuda budget carrier Citilink, Lion Air regional subsidiary Wings Air and soon Lion Air’s new full service unit Space Jet – are now committed to at least triple the size of their combined fleets from the current figure of about 180 aircraft.

Other Indonesian carriers, including Indonesia AirAsia, Batavia, Mandala and Sriwijaya, are also expected to rapidly grow their fleets as the total number of commercial aircraft operating in Indonesia could approach 1000 aircraft towards the end of the next decade.

Tiger places big bet on Indonesia with re-launch of Mandala

Tiger Airways is banking the booming Indonesian market can support another new carrier and absorb over the next 14 months at least 10 A320s from the struggling airline group’s surplus fleet. Singapore-based Tiger has not yet invested a penny into Mandala Airlines but has a lot at stake as the Indonesian carrier plans to resume services in April following a 15-month hiatus, using Tiger’s aircraft and business model. While it only had to pay a token one dollar for its 33% stake in Mandala, Tiger along with Mandala’s other new investors will be providing a loan to cover re-launch costs and will need to continue pumping in capital until the airline becomes profitable, a potentially challenging proposition given current market conditions in Indonesia.

The new Tiger-backed Mandala will compete against three powerful LCCs in the Indonesian market – Lion Air, Indonesia AirAsia and Garuda Indonesia budget unit Citilink. These carriers combined now operate about 100 aircraft and are all expanding at high double-digit rates. Mandala will also have to compete against Garuda’s fast-expanding mainline operation and three second tier Indonesian carriers – Batavia Air, Sriwijaya Air and Merpati Nusantara Airlines – which also currently operate a combined fleet of about 100 aircraft and offer low fares, although they are not generally considered to be LCCs.

Paris 2011: AirAsia’s landmark order pushes A320neo programme beyond 1,000 orders

With a landmark order for 200 A320neos, AirAsia has committed to increasing its narrowbody fleet to 375 aircraft and expects it will need at least 125 more aircraft as it works on establishing at least two more joint venture carriers. The deal, signed at the Paris Air Show on 23-Jun-2011, is the largest ever single order placed with Airbus in terms of number of aircraft. It also extends the total number of aircraft sold by Airbus this week to 730 – an all-time air show record – and even more impressively means the manufacturer has now sold over 1,000 A320neos since the programme was launched only six months ago.