Malindo Air, which made its maiden flight just nine months ago in Malaysia, has managed to get its hands on some lucrative routes in the highly competitive airline industry of India.
The achievement is quite a coup for the carrier owned by Jakarta-based Lion Air, which also inaugurated its Thai operations last week.
The Indian slots the carrier won are in big cities as well as secondary points. Malindo will add New Delhi to its network on Dec 30 and Mumbai on Feb 15. Trichy (Tiruchirappalli), in the southern state of Tamil Nadu, will be added on Jan 2.
Since launching in September 2012 and making its inaugural flight on March 22 this year, Malindo has taken very little time to build a network of domestic and international destinations, operating from two hubs and using two different aircraft types.
The bigger players such as AirAsia and Malaysia Airlines (MAS) did not take Malindo seriously when it arrived on the scene, believing it would stall or fail, but they’re paying attention now.
MAS is dumping fares to keep its planes filled in places where Malindo flies, and AirAsia has also to make fare adjustments on some routes.
Malindo has added nearly a dozen local routes that it operates from KL International airport using jets, and from Subang Skypark using ATR turboprop planes.
Interestingly, Malindo has been able to fly out of Subang while AirAsia founders Tony Fernandes and Kamaruddin Meranun have been trying since 2011 to get their Caterham Jets business jet operation up and running at the same airport. They have two small jets in hand and an order for six more.
They tried to team up with Berjaya Air but talks fizzled out in 2011 to use the latter’s air operator’s certificate (AOC). Now Berjaya seems to be getting ready to launch its own business jet operation out of Subang.
Whether Caterham Jets will get its own AOC or will still try to find a partner remains to be seen. If either one takes off, it will offer scheduled business flights to major cities such as Jakarta, Bangkok, Manila, Hong Kong and Shanghai.
Malindo, meanwhile, has begun cruising the global skies by making Dhaka its first international stop seven months after it began operations. It has since added Chittagong to its network, as well as Jakarta and Bali. It is enjoying a load factor of more than 70% system-wide since inception and 87% on-time performance.
For Malindo the link to Jakarta and Bali is vital to get the Indonesia traffic as the carrier has also positioned itself as a gateway for Indonesians to the world. It is a joint venture between Malaysia’s Nadi Sdn Bhd and Indonesia’s PT Lion Grup, the owner of Lion Air, which continues to be barred from Europe and the United States because of a poor safety record. So Lion is banking on Malindo as the international vehicle to give its Indonesian passengers a gateway to the world via Kuala Lumpur.
India is something Malindo had also wanted badly, though it took more time than it had anticipated. But still, the speed at which it got the approvals from the Indian authorities is commendable.
What helped was the availability of landing slots abandoned by AirAsia X (AAX) in Delhi and Mumbai. The long-haul arm of AirAsia was enjoying good load factors, but said it was losing money because of higher airport charges and visa restrictions on travellers imposed by Indian authorities.
AirAsia X says it hopes to return to India, but that might now require the Indian government to agree on more landing slots for Malaysian airlines, and Malaysia would have to reciprocate.
When AAX began services to India more than two years ago, it started off with bargain-basement fares of 199 ringgit for Mumbai and Delhi, and breaking even became a challenge even as fares rose to more rational levels.
Malindo is charging RM599 all-inclusive for each of the two cities. A return ticket on Malindo is RM1,200, which is closer to the MAS fares of RM1,500 or more depending on peak and non-peak periods. Malindo believes that even by throwing in allowances of more than 20 kilogrammes of baggage it can make money. Its Trichy route is priced at RM399 one way all-inclusive.
There is a steady flow of traffic from Kuala Lumpur to Delhi for trade and investment, tourism or for religious reasons, and MAS has enjoyed high loads, though some of the traffic is seasonal. With new competition to India, MAS may now have to cut its fares just as it did in Dhaka when Malindo started flying to Bangladesh.
India is the flavour of the month for Malindo and China will be the focus next year. Whether it will make a difference on the Indian routes remains to be seen, but MAS and AirAsia are not about to give up without a fight. AirAsia also flies to Trichy and has a good business there.