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Name: LION AIRLINES
7JetSet7 Code: MLI
Status: Operational
Region: ORIENT
City: JAKARTA
Country: INDONESIA
Employees 1000
Web: lionair.co.id
Email: ih@lionair.co.id
Telephone: +62 21 632 6038
Fax: +62 21 634 8741
Sita:
Background
(definitions)

Click below for data links:
MLI-2003-12-NEWS
MLI-2004-07-1ST 737-400
MLI-2004-07-A-737-4YO
MLI-2004-11-MD-80
MLI-2004-12 ACCDT
MLI-2004-12-A
MLI-2004-12-B
MLI-2004-12-C
MLI-2005-05-RANK-A
MLI-2005-05-RANK-B
MLI-2005-05-RANK-C
MLI-2005-05-RANK-D
MLI-2005-08-A-737-900ER LAUNCH
MLI-2005-08-A-MD-82
MLI-2005-TOP LCC
MLI-2007-02-737-900ER
MLI-2011-11 - 737 ORDER
MLI-2011-11 - 737 ORDER - A
MLI-2011-11 - 737 ORDER - B
MLI-2011-11 - BIGGEST AND BIGGER
MLI-2012-02-737 MAX 9 ORDER-A
MLI-2012-02-737 MAX 9 ORDER-B
MLI-2012-03 - 60TH 737-900ER
MLI-2013-01 JAKARTA SEAT CAPACITY
MLI-2013-03 - A320neo ORDER
MLI-2013-03 - MALINDO AIR LAUNCHES
MLI-2013-04 - ACCDT 737-800-A
MLI-2013-04 - ACCDT 737-800-B
MLI-2013-04 - ACCDT 737-800-C
MLI-2013-04 - ACCDT 737-800-D
MLI-2013-07 - AIRLINES SERVING MEDAN
MLI-2013-07 - MEDAN AIRPORT GROWTH
MLI-2013-08 - TOP 12 ASIAN SUMMER MARKETS
MLI-2013-08 - TOP 30 AIRLINES IN ASIA
MLI-2013-08 - TOP 30 ASIA AIRPORTS
MLI-2013-10 - CS300 INTEREST
MLI-2013-11 - 100TH 737NG
MLI-MAP

ESTABLISHED IN 1999 AND STARTED OPERATIONS IN 2000. A K A PT MENTARI LION AIRLINES. DOMESTIC & REGIONAL, SCHEDULED & CHARTER, PASSENGER & CARGO, JET AIRPLANE SERVICES.

ADDRESS:
Lion Air Tower
7 Gajah Mada, Jakarta Barat,
Jakarta 10130, Indonesia

Indonesia (the Republic of Indonesia) was established in 1945, it covers an area of 1,904,569 sq km, its population is 240 million, its capital city is Jakarta, and its official language is Indonesian.

JUNE 2000: (lionair@cbn.net.id).

PARENT COMPANY IS LION TOURS.

STARTS SCHEDULED PASSENGER SERVICES BETWEEN JAKARTA AND PONTIANAK USING A 737-200.

CHARTER SERVICES OUT OF HALIM AIRPORT.

AIRPLANES SHOW "LION AIRLINES."

PLANS FOR +3 737'S OVER NEXT 3 MONTHS, & EXPANSION OF ROUTE NETWORK TO PALEMBANG, MEDAN, AND UJUNG PANDANG. REGIONAL SERVICES TO SINGAPORE, AND KUALA LUMPUR, ARE EXPECTED.

1 737-2P5 (502-21440, /77 38 44, PK-LIA), EX-THAI AIRWAYS (TII), NATIONAL AVIATION (NTV) 3 YEAR LEASED.

AUGUST 2000: MR ROMDANI, DIRECTOR MAINTENANCE. YON KARYONO, QUALITY ASSURANCE MANAGER.

DECEMBER 2000: GOVERNMENT OK'S INTERNATIONAL FLIGHTS, PEKANBARU - SINGAPORE (737-200), & SURABAY - KUALA LUMPUR. MEDAN TO PENANG AND KUALA LUMPUR.

PLANS TO ORDER 25 YAKOVLEV YAK 42D'S.

JANUARY 2001: TO SUBANG (YAK-42).

FEBRUARY 2001: ADDS KUALA LUMPUR, SURABAYA, AND PENANG - MEDAN.

MARCH 2001: 1 YAK 42D (4520422219055, RA-42412), CHELYABINSK (CHE) LEASED.

MAY 2001: DENPASAR (BALI) - DILI (EAST TIMOR). IN JULY 2001, DENPASAR - TAIPEI, SEOUL (4/WEEK). IN OCTOBER 2001, TO KUALA LUMPUR, MEDAN, AND MADRAS.

2ND 737-200, (NTV) LEASED.

JUNE 2001: INTERNATIONAL SERVICE TO TOKYO, AND TAIPEI.

1 A310, EX-AWAIR (AWR) DELIVERY.

AUGUST 2001: INDONESIAN (CAA) OK'S BALI TO TAIPEI AND SEOUL (A310-300, 3/WEEK).

1 A310-300 (JT9D-XXX) (410), REGIONAIR (RAE) WET-LEASED.

OCTOBER 2001: 2 MD-82'S, REGIONAIR (RAE) LEASED. +3 ORDERS, (RAE) LEASED.

JANUARY 2002: ACCDT: (MLI) 737-291 (218-20363, /69 66 65 PK-LID W/O) REJECTED TAKEOFF, AND THE AIRPLANE STOPPED APPROXIMATELY 900 FEET BEYOND END OF RUNWAY, HIT FENCES AND MINOR STRUCTURES AND WAS HEAVILY DAMAGED. 7 INJURIES. WAS TAKING OFF FROM AN AIRPORT NEAR THE TOWN OF PEKANBARU ON SUMATRA ISLAND.

April 2002: 325 employees (including 26 Flight Crew (FC); 90 Cabin Attendants (CA); & 44 Maintenance Technicians (MT).

(http://www.lionairlines.com).

Owners/Shareholders: Lion Tours and other investors.

Main Base: Jakarta Soekarno Hatta International airport (CGK).

Hub: Kuala Lumpur International airport (KUL).

June 2002: 2 MD-82's (49417, PK-LMG; 49419, PK-LMH), ex-Korean Airlines (KAL), Castle Harbour leased.

July 2002: 3 Yak-42D's (4520424116698, RA-42408; 452042219055, RA-42412; 452042219066, RA-42413), returned to Chelal-Chelalyabinsk (CSK).

August 2002: To Singapore (2/day).

September 2002: 1 MD-82 (49262), leased.

October 2002: 2 MD-82's (48069; 48083, PK-LML), CIT (TCI) leased. 1 MD-82 (49263, PK-LMI), GATX (GAX) leased.

November 2002: 1 MD-82 (49189) + 1 MD-83 (49373, PK-LMO), GECAS (GEF) leased. MD-82 (53481, S7-ASK) sold to RegionAir (RAE).

January 2003: 1 MD-82, leased.

April 2003: 325 employees (including 26 Flight Crew (FC), 90 Cabin Attendants (CA), & 44 Maintenance Technicians (MT)).

(info@lionairlines.com).

Parent organization/shareholders: Lion Tours.

May 2003: Plans +8 MD-82/-83's by July 2002. Also, possible 10 Bombardier DHC-8-100's and up to 7 F 100's for use by its subsidiary, Wings Air (WON).

2 MD-82's (49102, PK-LMP; 49117, PK-LMQ), Castle Harbor leased.

July 2003: 2 MD-82's (49114; 49118), GECAS (GEF) leased.

September 2003: In November 2003, Jakarta - Singapore and Vietnam. Denpasar (Bali) to Australia.

October 2003: MD-82 (49443, PK-LMW), Heller Financial leased.

December 2003: Jakarta - Singapore - Ho Chi Minh City (5/week). In 2004, Medan - Chennai (Madras)/Kolcata (Calcutta)/Mumbai, and service to Guangzhou.

Plans to add +15 MD-80's for total 33.

February 2004: MD-82 (49429, PK-LMU), Heller leased.

April 2004: MD-83 (49788, PK-LMK), GATX (GAX) leased.

May 2004: MD-82 (49116, PK-LMR), wet-leased to Myanmar (BRM). MD-82 (49250, PK-LMY), Kuta-Two Aircraft leased, wet-leased to (BRM).

June 2004: MD-82 (49116) returned from (BRM).

August 2004: 2 737-4YO's (24467, PK-LIF; 24513, PK-LIG), ex-Merpati (PNM), GECAS (GEF) leased.

October 2004: 1 + 9 orders 737-400's, and 5 orders (June 2005) MD-90-30's.

November 2004: 1,000 employees.

Signs a 25-year lease to operate out of a tertiary airport in Jakarta, named Halim Perdanakusma (IATA) Code: HLP; (ICAO) Code: WIHH; (which is now used primarily by top governmental officials & the air force) from early 2006, after plans to build a new terminal at Jakata Soekarno Hatta (CGK) fell through. Will rebuild and manage (HLP) and expects refurbishment to start next month. Until 2006 will continue to operate out of (CGK).

December 2004: ACCDT: (MLI) MD-82 (1173-49189, PK-LMN) ran off the runway on landing at Solo City-Adi Sumarmo Airport during heavy rain with a tailwind and finished up in a cemetery = 25 fatalities of 154 passengers & crew. The airplane has been written-off (W/O)

January 2005: MD-82 (49116), returned to Castle Harbour Leasing, leased to Wings Abadi Air (WON).

February 2005: In June 2005, Jakarta - Seoul, via Denpasar & Manila. Jakarta - Phusan, via Denpasar & Manila.

737-4YO (24520), ex-Asiana Airlines (AAR), (GEF) leased.

March 2005: Memo of Understanding (MOU) 40 orders (February 2007) 737-900X's

MD-90-30 (53570), ex-American Airlines (AAL), BCC leased.

April 2005: MD-90-30 (53573, PK-LIK), (TBC) leased.

May 2005: $3.9 billion, 30/30 orders (May 2007) 737-900ER's (CFM56-7B), 215Y, 3,200 nautical miles/5,900 km range. Boeing (TBC) claims -9% lower operating costs per trip and -7% lower operating costs per seat than the A321, which is more than >10,000 lbs/4,536 kg heavier than the 737-900ER.

June 2005: MD-82 (49489) & MD-90-30 (53551), Boeing Capital (TBC) leased.

July 2005: 737-4YO (24911, PK-LIQ), GECAS (GEF) leased.

October 2005: The Indonesian government banned the operation of 737-200s owing to "safety concerns" in the wake of last month's Mandala Airlines (MND) crash. At the same time, the government banned all airplanes more than >35 years old and/or with more than >70,000 cycles. The crash was the eighth involving Mandala (MND) since 1975 and there have been 74 crashes involving transport airplanes in Indonesia since 1990.

February 2006: Boeing (TBC) said engineers have completed 90% of the drawings for the 737-900ER launched in July 2005 with an order for 30 from Lion Air (MLI) of Indonesia. The airplanes will seat up to 215 passengers and fly up to 3,200 nm.

March 2006: 737-300 (23218), ex-PACE Airlines (PIE), EAST leased.

INCDT: (MLI) MD-82 (1291-49443, /86 PK-LMW), departed the runway during landing at Juanda Airport, Surabaya, in poor weather (rain and strong winds). At the time of the incident, the airplane was operating a scheduled flight from Ngurah Rai Airport (Bali) with 6/138 crew/passengers = no injuries but the airplane sustained damage in some areas, including the nose landing gear.

April 2006: 737-300 (23219), ex-PACE Airlines (PIE), EAST leased.

June 2006: Boeing (TBC) began final assembly yesterday on the first 737-900ER, which will undergo a five-month flight test program later this year and eventually be delivered to Indonesia's Lion Air (MLI).

July 2006: Exercises options on 30 737-900ER's to bring orders to 60. (CFM) valued engines for Lion Air (MLI)'s order for 30 737-900ERs at $360 million at list price.

September 2006: Boeing (TBC) operated the first 737-900ER test flight, taking off from Renton and flying for 45 minutes over Washington and Oregon, before landing at Boeing Field in Seattle, marking the start of a five-month test program aimed at securing (FAA) and (EASA) certification by early 2007, followed by delivery to launch customer Lion Air (MLI). The manufacturer has firm orders from five customers for 80 737-900ERs, designed to carry up to 215 passengers and fly up to 3,200 nm.

November 2006: Lion Air (MLI) announced that it plans to add service to 7 new international destinations from April 2007 using the new to be delivered 737-900ERs. The airline is planning to fly to Beijing, Guangzhou and Shanghai (China); Chennai, Madras and Mumbai (India); and Bangkok.

February 2007: Lion Air (MLI)'s first 737-900ER is proceeding through its flight testing, presently at Edwards Air Force Base (AFB), California and is on course for its April delivery - see attachment.

March 2007: The Indonesian government announced a ban on commercial airplanes older than 10 years following several mishaps and accidents, the worst of which was the January 2007 crash of a 17-year-old Adam Air (DHI) 737-400 that killed 102. According to the "Associated Press," Transport Minister, Hatta Rajasa insisted the regulation would not require parliamentary approval, but did not indicate when it would go into effect. The current age limit is 20 years. Adam Air (DHI) announced last month, that it intended to lease six A320s and build up a fleet of 30 of the type "over the next five years," replacing the 737s it now operates. New airplanes will be both leased and purchased.

April 2007: The USA (FAA) announced that Indonesia "does not comply with international safety standards set by (ICAO)" and lowered the country's safety rating to Category 2, ruling that it is "no longer overseeing the safety of its airlines in accordance with international standards." The USA State Dept issued its own statement saying that last month's safety assessment conducted by the Indonesian Directorate General of Civil Aviation did not include "detailed methodology supporting the ratings" and that "Americans traveling to and from Indonesia should fly directly to their destinations on international carriers from countries whose civil aviation authorities meet international aviation safety standards."

737-9GPER (35679, PK-LFF), delivery.

May 2007: CFM International said its (CFM56-7B) and (CFM56-5B) "Tech Insertion" program is on track, noting that the first airplane powered by the (CFM56-7B) engines with the feature, a 737-900ER, was delivered to Jakarta-based Lion Air (MLI) at the end of last month. Entry into service of the (CFM56-5B) variant for A320 family airplanes is planned for the 2007 fourth quarter. "We expect the [Airbus (EDS)] airplane certification during the third quarter," confirmed Executive VP, Francois Planaud at a briefing in Helsinki that focused on the Original Equipment Manufacturer (OEM)'s commitment to produce environmentally friendly engines. He stressed that "Tech Insertion" will deliver value to operators, including up to -5% lower maintenance costs through enhanced durability and up to -1% fuel consumption improvement. The engine complies with the new (ICAO) CAEP/6 standards on NOX emissions scheduled to be implemented next year. The company's LEAP56 (Leading Edge Aviation Propulsion) program also is moving ahead, Planaud said. He disclosed that (CFM) is evaluating "game-changing" architectures, including a counter-rotating fan and an open-rotor fan. The former will meet stringent noise reduction requirements and the latter will deliver fuel burn reductions. (CFM) co-parent General Electric (GEC) has experience with open rotor fans, having developed the Unducted Fan demonstrator in the 1980s, which was mated to the MD-80 Ultra High Bypass Demonstrator. Tests on a two-stage counter-rotating fan could be launched in the near future, Planaud said.

737-9GPER (35680, PK-LFG), delivery.

June 2007: At the Paris Air Show, Indonesia's Lion Air (MLI) increased its commitment to the 737-900ER with an order for an additional 40, worth $3 billion, bringing its firm buys to 100. Founder & President, Rusdi Kirana said that the 100 airplanes are being delivered at a rate of two per month and "the airline will have an all-737-900ER fleet by 2009." Kirana called the 737-900ER "the right airplane to support our growing route structure throughout Southeast Asia." Lion Air (MLI) launched the program in June 2005 with an order for 30 and increased that commitment in July 2006 by an additional 30. Boeing (TBC) has sold more than >7,000 737s to more than 240 customers.

737-9GPER (35710, PK-LFH), delivery.

July 2007: Indonesia and (ICAO) signed a "groundbreaking declaration" in Bali under which Indonesia committed to wide-ranging initiatives to improve the safety of its civil aviation system. The deal comes after the European Union (EU) banned all Indonesian airlines from flying into its airspace. Indonesia will restructure the Directorate General of Civil Aviation, enact the required legal framework for it effectively to meet international safety obligations, ensure the required human and financial resources and correct deficiencies identified by (ICAO)'s Universal Safety Oversight Audit Program and other internal or external audits. (ICAO) said, "Indonesia will also implement a proactive and systemic management of safety to comply, in a verifiable manner, with national requirements and (ICAO) international safety standards and industry best practices. This includes a commitment by government authorities and the local air transport industry to foster transparency and the sharing of safety-related data to support the safety management process, under guidelines established by (ICAO)."

737-9GPER (35711, PK-LFI), delivery.

August 2007: 737-9GPER (35712, PK-LFJ), (GEF) leased.

November 2007: The European Commission (EC) issued the sixth update of its airline blacklist, removing Suriname's Blue Wing Airlines and lifting the operating restrictions imposed on Pakistan International Airlines (PIA). Both carriers, however, will remain subject to prioritized ramp inspections at Community airports in order to ensure their "consistent adherence" to relevant safety standards. "This latest revision shows that when airlines take rapid and sound corrective action to comply with safety standards, they can be withdrawn from the list quickly," (EC) VP Transport, Jacques Barrot noted. "It also shows that the list increasingly serves as a preemptive, rather than punitive tool for safeguarding aviation safety." He added that relevant oversight authorities verified measures taken by (PIA) and Blue Wing Airlines and "that these measures provide for long-lasting sustainable solutions to avoid the same problems recurring in the future."

The blacklist now comprises eight individual carriers including TAAG Angola Airlines (ANG), Mahan Air (MHN), and Ukrainian Mediterranean Airlines (UM Air - (UKM)), whose operations are fully banned in the (EU). Also banned are all airlines from Equatorial Guinea (ECV), Indonesia: (AWR); (BLN); (BTV); (DHI); (FES); (GIA); (KTK); (LKW); (MLI); (MND); (NOK); (PNM); (PTF); (REX); (SJA); (TGN); (TMG); (WON); (XPR); Kyrgyzstan: (ITL); (KYR); (PHG); (PHX); (STZ); Liberia: (LBG); Sierra Leone: (ORG); (RUM); (UVL); Swaziland: (AFC); and Democratic Republic of Congo: (TCS); (WDA); & (WET) with the exception of Hewa Bora Airways (EXD), which is subject to operating restrictions). Operational restrictions were placed on Air Bangladesh (BGD) and Air Service Comores (COM).

December 2007: Indonesia's Lion Air (MLI) is the customer for 22 737-900ERs. An order was placed on May 25 for 62 737-900ERs, with 40 confirmed at the Paris Air Show and the balance now confirmed. The announcement takes Lion Air (MLI)'s total 737-900ER commitment to 122 firm airplanes. It launched the 737-900ER program in 2005 with an order for 30 and increased that commitment the following summer by an additional +30. It is taking the airplanes at the rate of two a month, including seven this year, and will have an all-737-900ER fleet by mid-2009. The 22 new airplanes are valued at $1.7 billion at list prices, Boeing (TBC) said. All airplanes will be equipped with blended winglets. Boeing (TBC) said it has received orders for 169 737-900ERs from eight customers.

2 737-9GPER (35714, PK-LFL; 35717, PK-LFP), deliveries.

January 2008: Australian aviation regulatory authorities are going to come under the spotlight after Indonesian low-cost carrier (LCC) Lion Air (MLI) announced its plans to launch domestic operations in Australia with six 737-900ERs. According to the Centre for Asia Pacific Aviation (CAPA), the airline has "reportedly reached agreement with an Australian company to take a 49% stake and base six airplanes in Australia." However, with Indonesia's poor safety record and bans on international flights to both the USA and the (EU), Australia's Civil Aviation Safety Authority will come under scrutiny as it works on approving operations for an Indonesian airline based in Australia. Lion Air (MLI) has 122 737-900ERs on order and also plans to establish an operation in Thailand with four airplanes.

According to (CAPA)'s Derek Sadubin, (MLI) is interested in investing in Vietnam, Bangladesh, Malaysia, and the Philippines, and plans to spend $50 to $100 million in each venture, with funding to come from both internal and external sources. Lion (MLI) is receiving 737-900ERs at a rate of one per month through 2014.

737-9GPER (35715, PK-LFM), delivery.

February 2008: Indonesia's rapidly expanding Low Cost Carrier (LCC) Lion Air (MLI) ordered an additional 56 737-900ERs valued at $4.4 billion, bringing its firm commitments for the type to 178. The airline also took purchase rights on a further 50. It launched the 737-900ER program in July 2005 with an order for 30. Speaking in Singapore at the order announcement, President, Rusdi Kirana said Lion Air (MLI) is committed to "growing its fleet with fuel-efficient, reliable and technologically advanced airplanes." The 737-900ERs are replacing a mixed fleet of MD-80s, MD-90s, and 737-300s.

737-9GPER (35716, PL-LFO), delivery.

April 2008: 737-9GPER (35713, PK-LFK), delivery.

July 2008: The eighth edition of the European Commission (EC)'s blacklist of banned airlines does not include Iran's Mahan Airlines (MHN), thanks to "significant efforts and progress accomplished by this carrier, which were verified during an on-site inspection," but continues to include Indonesian airlines, including Garuda Indonesia (GIA). "The Commission (EC) decided that the Indonesian authorities have still not developed and implemented an efficient oversight program on any of the carriers under their regulatory control," it said. Ukraine Cargo Airways remains banned as well, and Yemenia Airways (YEM) was told it "should complete its corrective actions plan" by the Air Safety Committee's next meeting. All airlines from Equatorial Guinea, Indonesia, Kyrgyzstan, Liberia, Sierra Leone, Swaziland, and the Democratic Republic of the Congo are banned, while Gabon Airlines and Afrijet (FRJ) from Gabon are allowed to maintain operations at their current level.

August 2008: Indonesia's economy grew +6% (year/year) in the second quarter (Q2).

737-9GPER (35719, PK-LFR), delivery.

November 2008: The European Commission (EC) added some other airlines to its list of airlines banned from flying into the European Union (EU). Regarding the Philippines, the (EC) said it "intends to carry out with member states a safety assessment of the Philippine civil aviation authorities in early 2009."

Lion Air (MLI) signed a Memo of Understanding (MOU) with ATR for 10 firm ATR72-500s with options for 10 more. The deal is valued at more than >$380 million including options. Deliveries are slated to start in 2009. The 72-seat turboprops will be operated by Lion Air (MLI) subsidiary, Wings Air (WON), which is aiming to develop a low-cost network to feed Lion Air (MLI)'s major hubs.

December 2008: World nations currently rated Category 2 by the USA (FAA) under the agency's International Aviation Safety Assessment (IASA) program are: Bangladesh, Belize, Ivory Coast, Croatia, Democratic Republic of Congo, Gambia, Ghana, Guyana, Haiti, Honduras, Indonesia, Israel, Kiribati, Montenegro, Nauru, Nicaragua, Paraguay, Philippines, Serbia, Swaziland, Ukraine, Uruguay and Zimbabwe. The (FAA) rating prevents nation's airlines being allowed to fly into the USA. They have the option to fly to the USA with an airline who is approved under Category 1.

The (FAA) states that a Category 2 rating "may involve a country lacking laws or regulations necessary to oversee air carriers in accordance with international standards, or that its civil aviation authority does not meet international standards in one or more areas such as technical expertise, trained personnel, record keeping, or inspection procedures."

737-9GPER (35720, PK-LFS), delivery.

February 2009: 737-9GPER (35721, PK-LFT), delivery.

March 2009: INCDT: Lion Air (MLI) MD-90-30 (2144-52551, PK-LIL) was set to land on Runway 25L with the wind notified as 200 degrees at 20 kt. On touching down, the captain (FC) could not keep the airplane straight. It came to a halt partially off the right side of the runway heading 152 degrees. 6/166 on board were OK.

2 737-9GPERs (35722, PK-LFU; 35723, PK-LFV), deliveries.

April 2009: The USA Export-Import Bank announced approval of some $1.08 billion in financing to support the delivery of up to 30 737-900ERs to Indonesia's Lion Air (MLI). The financing comprises $238 million in a first stage and a nonbinding preliminary commitment of $841 million. Ex-Im Bank said the transactions were its first in support of the 737-900ER.

Indonesia's Ministry of Transportation said all airlines based in the country will be required to operate at least 10 airplanes (each) by 2012, at least five of which must be owned. "If not, they will have to shut down or merge with other airlines to meet the quota," a ministry spokesperson told reporters. The rule change (currently Indonesian carriers only have to own two airplanes) is driven by safety concerns. "We want airlines to be financially sound and committed to giving the best in terms of service and safety," the spokesperson said, according to "Agence France Presse."

737-9GPER (35724, PK-LFW), delivery. 2 747-412s (24063, PK-LHF; 24065, PK-LHG), deliveries, ex-Singapore Airlines (SIA).

May 2009: 2 737-9GPERs (35725, PK-LFY; 35726, PK-LFZ), deliveries.

June 2009: 737-9GPER (35727, PK-LGJ), delivery.

July 2009: Iran's Mahan Air (MHN) was added to the (EU)'s list of banned airlines, while Garuda Indonesia (GIA), Airfast Indonesia (PTF), Mandala Airlines (MND) and Premiair were removed from the "blacklist." The latest update did not include Yemenia Yemen Airways (YEM), despite recent controversy following the June 29 A310-300 crash that killed 152 passengers and crew. All airlines from Zambia and Kazakhstan were added to the list with the exception of Air Astana (AKZ), which will be allowed limited access to (EU) nations.

TAAG Angola Airlines (ANG), already on the list of more than >200 carriers, will be allowed to operate "into Portugal only with certain airplanes and under very strict conditions," the European Commission (EC) said, adding that the limited access was granted to acknowledge "progress made by the civil aviation authority of Angola [and TAAG (ANG)] to resolve progressively any safety deficiencies." All other Angolan airlines remain banned. All Indonesian carriers remain banned apart from the aforementioned four. Complete bans are in place on airlines from Benin, Democratic Republic of Congo, Equatorial Guinea, Gabon, Kyrgyzstan, Liberia, Sierra Leone and Swaziland.

European Commission VP Transport, Antonio Tajani has called for a global blacklist, a suggestion that has been rejected by (ICAO) for now. "We will not accept that airlines fly at different standards when they operate inside and outside Europe," he said, renewing his call. "It is high time that the international community rethinks its safety policy; those airlines which are unsafe should not be allowed to fly anywhere."

Lion Mentari Airlines (MLI), which carried the most domestic passengers in Indonesia last year, is still banned from flying to Europe. "(MLI) must get rid of all its older planes and improve the skills of its pilots (FC) to get a green light," it was stated.
“There is nothing wrong with an old airplane as long as it is extremely well maintained. In Indonesia, however, maintenance is very weak.” Under the new regulations, all Indonesian airlines must go through audits every three months, and other countries, including those from the European Union (EU), can send independent monitors to check the capability of Indonesian pilots (FC) and safety of Indonesian planes.

The new Indonesian law requires airlines to operate at least 10 planes to get new operational certification for scheduled flights. Carriers must also publish safety targets and achievements, and board appointments require the approval of the transport minister. “If you do not have much capital to properly manage an airline, you should merge. At least they should form some sort of alliance like the Star Alliance (SAL) that can give that group a standard to fix their safety levels.”

August 2009: 2 747-412S (24063; 24065, PK-LHF - - SEE PHOTO - - "MLI-747-412-2009-08"), ex-Oasis Hong Kong (OHK), deliveries for a daily, Jakarta - Jeddah service. Lion Air (MLI) is targeting Indonesian migrant workers and plans more Middle East services from March 2010.

September 2009: 737-9GPER (35729, PK-LGL), delivery.

December 2009: 4 737-9GPERs (35730, PK-LGM; 35731, PK-LGO; 35732, PK-LGP; 35733, PK-LGQ) deliveries. (MLI)'s 737 fleet now comprises 41 737-900ERs, 737-300s, and 737-400s.

January 2010: 737-9GPER (35734, PK-LGR), delivery.

February 2010: Honeywell (SGC) said that Indonesia's Lion Air (MLI) extended an avionics selection for 78 additional 737NGs, completing the entire 737 fleet of 178 airplanes with Honeywell (SGC) avionics including its IntuVue 3-D Weather Radar. Other systems include the CAS 100 ACAS with ADS-B, Quantum Line comm/nav radios, High Frequency Radio CNS, Solid-State Recorders, FDAMS and Rescu 406 ELT.

737-9GPER (35735, PK-LGS), delivery.

March 2010: 2 737-9GPERs (35736, PK-LGT; 35737, PK-LGU), deliveries.

July 2010: Celebrates its 10 year anniversary with the delivery of 4 737-9GPERs (37268, PK-LGV; 37269, PK-LGW; 37270, PK-LGY; 37271, PK-LGZ).

August 2010: Up to four new Indonesian airlines are expected to be given rights to fly from Indonesia to Australia after the two countries announced an increase of almost +50% in the weekly capacity to 14,800 seats. Indonesian carrier Batavia Air (BTV) announced it had been given rights to fly from Bali to Perth, Melbourne, and Sydney, while applications from Sriwijaya Air, Mandala Airlines (MND) and Lion Air (MLI) are pending.

Australian-based Pacific Blue (PBI), Jetstar (IMU) and Strategic Airlines (STC) - - along with AirAsia Indonesia (AWR) and Garuda (GIA) - - already operate on the principal routes leading some analysts to suggest that too many airlines were being allowed to service the market. However, that market is growing at an unprecedented rate. Travel from Perth to Bali jumped +46% in 2009 with 463,352 passengers carried both ways and early figures point to another +50% increase this year.

December 2010: 737-9GPER (3513-37277, PK-LHM), delivery.

February 2011: Wings Air and its parent company Lion Air (MLI) signed an operational contract for the purchase of 15 additional ATR72-500s. This new 72-seat airplane order, which follows the agreement signed in 2010, has been witnessed by Mr Hatta Rajasa, the Indonesian Coordinating Minister for Economic Affairs, Mrs Christine Lagarde, the French Minister of Economy, Finances & Industry, and Mr Philippe Zeller, HE the French Ambassador in Indonesia. These airplanes will bring to 30 the total fleet of ATRs operated by Wings Air (WON).

ATR and Lion Air (MLI) had previously inked a contract in 2009 for the purchase of 15 ATR72-500s and options for 15 additional airplanes. The deal announced today represents the conversion of all 15 options, resulting from a strong growth of Wings Air (WON)’s and Lion Air (MLI)’s markets.

(WON) introduced the new ATR72-500s in Indonesia in January 2010 and 10 of the airplanes are already in operation. With the delivery of the 15 additional airplanes, (WON) and (MLI) will become ATR’s largest customer in South-East Asia.

With its fleet of ATRs, (WON) is developing a strong regional network across Indonesia, increasing passenger traffic and frequencies, while improving connectivity to small and remote communities. (WON)’s ATR fleet is also enabling the airline to feed (MLI)’s 737-900ER vast routes network.

With the introduction of the new ATRs in the coming months, (WON) will further develop new routes from and to Sumatra, Sulawesi and Java, as well as connecting big cities with flying range within one hour, like Surabaya and Denpasar.

(MLI), its parent company, (WON) and ATR are all grateful to the French and Italian Governments for their essential support provided through their respective Export Credit Agencies (COFACE) and (SACE) in the financing that has permitted the operation of ATR72-500 airplanes by (WON).

Commenting on the announcement, Pak Rusdi Kirana, Chairman of (WON) and President Director of (MLI), declares: “Our increasing fleet of modern ATR airplanes is making a strong contribution to the growth of our national economy.

Filippo Bagnato, Chief Executive Officer of ATR, declares: This very dynamic South-East Asian market represents a third of our sales in the last year and there is already some 130 ATRs being operated there.

2 737-9GPERs (37275, PK-LHH; 37276, PK-LHI), deliveries.

September 2010: 737-9GPER (37272, PK-LHJ), delivery.

November 2010: INCDT: A 737-4Y0 (CFM56-3C1) (2033-24911, /91 PK-LIQ) operated by Lion Air (MLI) sustained substantial damage at Supadio Airport in Pontianak, West Kalimantan, Indonesia, after it overshot the runway on landing in heavy rainfall and its nose and main undercarriage collapsed, according to Ascend. The airplane came to rest in a field.

No injuries were reported among the 169 passengers and six crew (FC) - (CA), who safely evacuated the airplane. The accident happened at 11:25 am local time, Ascend reported. Flight JT 712 was arriving from Jakarta.

The National Transportation Safety Committee confirmed the accident to the "Jakarta Globe," saying bad weather was likely not a factor. The (KNKT) is investigating the incident. The event was not related to the recent Mount Merapi eruption.

May 2011: Lion Air (MLI), Indonesia's largest private airline, took delivery of its first NextGen 737-900ER on April 21. (MLI) was the launch customer for the 737-900ER in 2005. This delivery marks (MLI)'s 43rd 737-900ER. In all, (MLI) has ordered 178 NextGen 737s and operates an all-Boeing (TBC) fleet.

August 2011: Lion Airlines (MLI) is Indonesia's biggest airline by passenger vo0lume serving an extensive domestic network from Jakarta to more than >36 destinations, together with international extensions to destinations in Malaysia, Saudi Arabia, Singapore, and Vietnam.

Employees = 1,000.

Parent organization/shareholders: Rusdi Kirana & family (100%).

Owns: Wings Air (WON) (100%).

(IATA) Code: JT - 990. (ICAO) Code: LNI (Callsign - LION INTER).

Main Base: Jakarta Soekarno Hatta International Airport (CGK).

Domestic, Scheduled Destinations: Ambon; Balikpapan; Bandung; Batam; Cilacap; Denpasar Bali; Jakarta; Manado; Mataram; Medan; Padang; Palembang; Pekanbaru; Solo City; Sorong; Surabaya; Ternate; Ujung Pandang; & Yogyakarta.

International, Scheduled Destinations: Kuala Lumpur; & Penang.

September 2011: Lion Air (MLI) took delivery of its 50th NextGen 737-900ER.

October 2011: Boeing (TBC) and Lion Air (MLI), an all-Boeing (TBC) Next-Generation 737 operator, are pioneering the use of precision navigation technology in South Asia with the introduction of Required Navigation Performance (RNP) flight operations. (RNP) enables airplanes, using global positioning systems, to fly precisely predefined flight paths without reliance on ground-based navigation stations.

(MLI), together with (TBC) and the Indonesian Directorate General of Civil Aviation, successfully performed validation flights to test tailor-made (RNP) Authorization Required (RNP AR) procedures at two terrain-challenged airports, Ambon and Manado, Indonesia.

“We look forward to seeing these procedures fully implemented so we can realize the substantial economic and safety benefits provided by this program,” said Captain Ertata Lananggalih, Managing Director of Lion Air (MLI). The Directorate General of Civil Aviation Indonesia intends to implement (RNP) at other airports in the country.

(MLI) is employing the most advanced version of (RNP) — (RNP -AR) — that navigates the world’s most challenging terrain. (RNP) helps reduce airplane flight miles and provides for idle-power descents that save fuel, reduce emissions and noise and enhance safety.

“(TBC) is leading the way in designing and implementing performance-based operations such as (RNP),” said Neil Planzer, VP, Air Traffic Management, Boeing Flight Services. “ It’s part of our commitment to help our customers maximize the superior capability and technology inherent in their airplanes.”

(TBC) subsidiary, Jeppesen, designed, charted, and helped certify the instrument flight procedures, while Boeing Flight Services led the overall project, conducted an (RNP) Safety Assessment, and trained Lion Air (MLI)’s leadership, dispatchers and flight crews. (TBC) worked with Indonesia’s Directorate General of Civil Aviation through the construction of a national regulatory framework necessary to fully certify (MLI) for (RNP) operations under (ICAO) guidelines.

Lion Air (MLI) is the launch customer for the 737-900ER and the largest customer and operator of the 737-900ER in the world. (MLI) took delivery of its 50th Boeing 757-900ER Next-Generation in September. The Lion Air Group operates an extensive route network in Indonesia with 488 daily flights across 71 destinations.

2 737-9GPERs (37286, PK-LJF; 38305, PK-LHZ), delivery.

November 2011: Lion Air (MLI) and Malaysian travel conglomerate, the Berjaya Group have abandoned plans to enter Malaysia’s low-cost carrier (LCC) market, and AirAsia (ASW)’s investment flag carrier, Malaysia Airlines (MAS) may be one of the reasons.

Lion Air (MLI) and Berjaya announced in early June that they planned to transform Berjaya Air, a small turboprop operator, into a low-cost carrier (LCC) operating ATR72-500s and 737-900ERs. (MLI) was to own 49% of the airline, they said at the time.

But the Berjaya Group has disclosed that the deal has been terminated. In a statement to the Malaysian stock exchange, Berjaya failed to give a reason, except to say both parties were unable to finalize the terms of the agreement and other related arrangements. Berjaya is a large travel conglomerate that owns hotels and other properties in addition to Berjaya Air, a small carrier that mostly operates de Havilland Canada Dash 7s to coastal areas, where Berjaya has resorts.

Berjaya Air General Manager, Adelie Li declined to comment on why the deal with Lion Air (MLI) fell through. Industry executives close to (MLI), however, say that (MLI) thought twice about entering the market after (ASW) announced in early August it had reached a collaboration agreement with national carrier, Malaysia Airlines (MAS) to carve up the Malaysian airline market between them. It is clear (ASW) is now influential in Malaysian government circles, something an outsider like (MLI) could never hope to match.

(ASW) (CEO), Tony Fernandes and business partner, Kamurudin Meranun own 20.5% of (MAS). In the past several months, (ASW) and (MAS) have discussed collaborating on maintenance, repair and overhaul (MRO), pilot (FC) training and ground services to achieve cost savings. In addition, Fernandes is considering launching a premium service carrier targeted at business travelers and he may try to involve (MAS) in the new carrier.

Lion Air (MLI) has signed an intent to buy 201 737 Maxs and 29 Next-Generation 737-900ERS in a $21.7 billion deal that is Boeing (TBC)’s largest ever in dollar value. Purchase rights for a further 150 airplanes were included in the deal.

The agreement, announced in Bali, Indonesia, was made in the presence of USA President, Barack Obama.

Boeing (TBC) put the list price of the (MLI) deal at $21.7 billion. The 150-airplane purchase rights, if exercised, is valued at $14 billion.

"The 737 Max will be the future of Lion Air (MLI)," (MLI) President Director, Rusdi Kirana said. "The highly efficient, technologically advanced airplane will help Lion Air (MLI) continue to bring low fares and allow us to open new destinations because of the longer range of the airplane."

To date, the 737 Max has commitments for more than >700 airplanes, while 737NGs have won orders for more than >6,000 airplanes.

(MLI), Indonesia's largest private airline, operates or has on order a total of 178 737NGs.

January 2012: Lion Air (MLI) is said to be planning a new full-service airline called "SpaceJet" for launch next year.

2 737-9GPERs (37289, PK-LJJ; 38311, PK-LJK), deliveries.

February 2012: Lion Air (MLI) has firmed up its agreement with Boeing (TBC) announced in November to buy 201 737 MAXs and 29 737-900ERs in a $22.4 billion contract that is (TBC)’s largest ever. (MLI) also acquired purchase rights for a further 150 737s.

The initial commitment was announced in Bali, Indonesia, with USA President, Barack Obama present.

(TBC) put the list price of the (MLI) firm order for 290 airplanes at $22.4 billion. “This deal is the largest commercial airplane order ever in Boeing (TBC)'s history by both dollar value and total number of airplanes,” Boeing Commercial Airplanes (BCA) VP Asia-Pacific & India, Dinesh Keskar said at the contract signing at the Singapore Airshow.

The contract for the (CFM) International (LEAP-1B) engine order that will power the 201 737 MAXs is valued at approximately $4.8 billion at list prices, and the (CFM56-7B) engine order to power the 29 73-900ERs is valued at $580 million at list prices, (CFM) said.

(MLI) Founder & President Director, Rusdi Kirana said the contract offers the flexibility to decide closer to the delivery date, how much of each variant (MLI) will take. He also said financing of the new airplanes will be “no problem” and will be done partly through the USA Export-Import Bank (Ex-Im Bank) and other bank loans. (MLI) intends to outright buy up to 85% - 90% of the airplanes, he said.

He said he could not detail when the purchase rights would be converted into orders, noting that “much depends if the Asian "open skies" materializes. If it does, as we hope for by 2015, then a very big market opens up for us.”

Deliveries of the new order will start in 2017 and continue through 2026, by then it will have taken delivery of 408 new 737-900ERs/MAXs. The new firm order adds to existing orders for 178 737-900ERs; these deliveries run through 2016. (MLI) was the launch customer for the 737-900ER and received the world's first 737-900ER in April 2007.

(MLI) carried 27 million passengers last year and holds a domestic market share of 51%, Rusdi Kirana said. He aims to increase this to 60%. (MLI) began operations in June 2000.

To date, the 737 MAX has orders and commitments for “more than >1,000 airplanes” from 15 customers, Boeing (TBC) said.

2 737-9GPERs (37290, PK-LJL; 38313, PK-LJM), deliveries.

June 2012: Lion Air (MLI) has selected the 787 over the A330 for its new premium carrier, Batik Air.

Boeing (TBC) confirmed (MLI) has made a commitment to order five 787-8s. will launch Batik Air next year and initially transfer 10 737-800s to the new carrier.

In February, (MLI) firmed a commitment made in November for 201 737 MAXs and 29 737-900ERs in a $22.4 billion contract that is Boeing (TBC)’s largest ever. (MLI) also acquired purchase rights for a further 150 737s.

2 737-8GPs (37295, PK-LJW; 38722, PK-LJY), deliveries.

August 2012: GE Capital Aviation Services Limited (GECAS) (GEF), the commercial aircraft leasing and financing arm of (GE), announced it delivered two new 737-800 airplanes to Lion Air (MLI) as part of a purchase and leaseback transaction. The airplanes from (MLI)’s existing order book with Boeing (TBC) were delivered in May and July and will be used to expand and modernize (MLI)’s fleet.

PT Lion Mentari Airline (MLI) is Indonesia’s largest private airline with a fleet of more than >80 airplanes and passenger service to more than >60 destinations.

September 2012: Lion Airlines (MLI) will launch its full-service airline "Batik Air" in 2013.

(MLI) will reportedly launch a low-cost carrier (LCC), "Malindo Airways" (MXD) to begin services in May 2013, according to a "Bloomberg" report. Being based in Kuala Lumpur, Malindo Airways (MXD) will offer domestic and international services to Thailand, China, India, Japan, and Australia. Malindo (MXD) is a joint venture (JV) between (JT) and Malaysia’s National Aerospace & Defense Industries (NADI). (NADI) will hold 51% of the shares while Lion (MLI) will provide the airplanes and airline industry know-how holding a minority share of 49% in Malindo (MXD) which will operate with a low-cost carrier (LCC) business model.

According to Malaysian media, Malindo (MXD) will begin operations with a fleet of 12 737-900ERs, “which is scheduled to expand to a hundred within a decade.” Malindo (MXD) will also operate the first five 787-8s originally ordered by Lion (MLI) for its new full service carrier Batik Air that are expected to be delivered in 2015. According to Kirana, (MLI) will instead order an additional 10 787-8s that will then be operated by Batik and Malindo (MXD) with a final split of airplanes between the two subsidiaries yet to be determined.

(JT) President Director, Rusdi Kirana was quoted by "Bloomberg" as saying the (LCC) will sell tickets matching “or maybe lower” than AirAsia’s (ASW), which seems to have already welcomed the competition.

“It’s great. The more (ASEAN) airlines are allowed, the better,” tweeted (ASW) (CEO), Tony Fernandes. “I think Malindo is more problematic for Malaysia Airlines (MAS), not AirAsia (ASW). We have a very strong position in Malaysia and are really a regional company,” Fernandes added.

SEE RELATED ARTICLE ABOVE IN NOVEMBER 2011.

737-8GP (37297, PK-LKH; 38681, PK-LKG), deliveries.

December 2012: 4 737-800s, (GECAS) (GEF) leased.

January 2013: Lion Air (MLI) is set to shake up Southeast Asia's airline industry this year. Its Malaysian affiliate Malindo Airways is due to start flying in the first half of 2013 and will compete head-to-head against Malaysia's AirAsia (ASW). Malindo may also capture some traffic from Malaysia Airlines (MAS), because Malindo will offer frills such as free checked baggage and in-flight entertainment. (MLI) also recently established a Singapore-based airplanet leasing company called Transportation Partners. (MLI) has a large order-book for 737-900ERs and 737 MAX airplanes, and Transportation Partners' remit is to secure airplane financing and place some of these airplanes with other carriers around the globe.

February 2013: Jakarta based Batavia Air (BTV) has gone bankrupt. Home base, Jakarta Airport, was Batavia Air (BTV)'s busiest and (BTV) had a share of roughly 7% in terms of weekly seats and frequency placing as Jakarta's #4. (BTV) offered 25 destinations from the Indonesian capital. Two of those (daily flights each to Kupang (KOE) and Ternate (TTE)) did not face any competition, indicating the harsh reality of operating in the dense Indonesian area. SEE ATTACHED - - "MLI-2013-01 JAKARTA SEAT CAPACITY."

March 2013: Lion Air (MLI), Indonesia’s largest domestic carrier commenced services on the 1,100 km domestic route from Makassar (UPG) in the Indonesian province of South Sulawsi, to Yogyakarta (JOG) in Java. Beginning on 8 March, daily flights are offered on the route in competition with Merpati Nusantara Airlines (MPT)’s services of the same frequency. (MLI), which is set to soon launch a Malaysian subsidiary, Malindo Air, operates the new route using 737-800s.

Home to almost 240 million people according to the 2010 census, Indonesia is the largest economy in South East Asia. While around a tenth of the population still live below the poverty line, the country’s Gross Domestic Product (GDP) per capita growth has accelerated to an average of 6% annually in recent years, owing largely to exploding internal demand. This means that (unlike during the Asian financial crisis a decade earlier) Indonesia was sheltered from the negative effects of the post-2008 global economic breakdown.

Data available from (BPS) Statistics Indonesia reflects the favorable economic environment in Indonesia. The country’s commercial aviation market grew almost threefold in the period between 2003 and 2011, with domestic traffic expanding at a slightly faster pace than international. In 2011, a total of 126.5 million passengers travelled internally in Indonesia (+198% on 2003 figures), while 21.7 million were carried to and from the country (+150% vs. 2003).

Analysis of the 2012 data figures (passenger departures only) for the country’s five largest airports gives some first insights. Having handled close to 20 million domestic and 5.8 million international departing passengers in 2012, Jakarta Airport is Indonesia’s largest facility.

Denpasar, the country’s second-busiest airport, enjoys a fairly even split of services between domestic and international owing to its location on the highly popular island of Bali, while Surabaya (Indonesia’s #3) is largely driven by domestic traffic. +18.2% growth was noted here in 2012 for this segment, the best result amongst the top 5 airports.

Following the demise of Batavia Air (BTV) earlier this year, Indonesia’s domestic market is served by 11 carriers. However, capacity is fairly concentrated and the three largest airlines account for around 65% of weekly frequencies and 70% of seats. Lion Air (MLI), which has grown aggressively in recent years (domestic capacity +34% in April 2013 vs. April 2012), but still has over >300 Boeing (TBC) narrow-bodies on order, commands 45% of Indonesia’s weekly domestic seats.

While Garuda Indonesia (GIA) increases its seats it's offering by a modest +15% this April, keep an eye on another domestic carrier, Sriwijaya Air, which since last April has more than doubled its market share in terms of capacity offered up to 10%.

Of the top 10 international destinations offered from Indonesia, as many as seven are in fact regional routes. Singapore leads the ranks – while a total of 463 weekly flights are offered on the route by 16 airlines from just as many Indonesian airports, 54% of capacity is allocated to Jakarta.

Jeddah, is the highest-ranking long-haul destination from Indonesia in terms of weekly seats. In April 2013, the Saudi city will be served exclusively from Jakarta with marginally less frequencies than in the respective period of 2012 (28 weekly flights vs 31 in April 2012).

The Export-Import Bank of the United States (Ex-Im Bank) has approved a final commitment of $1.1 billion to finance the export of a fleet of 737-900ERs. The airplanes, with (CFM) International engines, will be exported to Indonesia’s largest privately owned airline, Lion Air.
(MLI).

The financing will support a portion of (MLI)’s outstanding orders for the 737-900ER, which includes 230 737 airplanes ordered in November 2011 (the largest commercial aircraft order in aviation history). (MLI) is the launch customer for the 737-900ER and will be the largest operator of the type.

The airplanes will be delivered to Lion Air (MLI), Malaysia (MAS)’s Malindo Airways (MXD) and Indonesia’s Batik Air (BTK).

(MLI) President & (CEO), Rusdi Kirana said this “substantial final commitment positions the Lion Group and Transportation Partners for future growth across the Association of South East Asian Nations (ASEAN) region.”

If Malaysia's AirAsia (ASW) can operate a joint venture (JV) in Indonesia, then Indonesia's Lion Air (MLI) can operate a joint venture (JV) in Malaysia. Malindo Air (MXD) has announced its first two routes and will operate at a service level between AirAsia (ASW) and Malaysia Airlines (MAS) with 737-900ERs.

Malindo Air (MXD) received its Air Operating Certificate (AOC) this month.

As AirAsia (ASW) develops ever more joint ventures outside of its original home market of Malaysia, Indonesia’s Lion Air (MLI) is finalizing plans for creating a joint venture (JV) in Malaysia to be known as Malindo Air (MXD), taking its name from the first few letters of Malaysia and Indonesia, and not because it’s an anagram of “Mad Lion.” The local (JV) partner is Malaysia’s National Aerospace & Defence Industries (NADI). Latest indications are that the airline will start operating from Kuala Lumpur International Airport’s (KLIA) main terminal building from 22 March with three daily flights to Kota Kinabalu, followed on 23 March by four daily flights to Kuching. Both of these routes are already well served by Malaysia’s two biggest airlines:

The following shows these two destinations, with sector length and competition (weekly departures):

Kota Kinabalu (BKI): 1,631 km: AirAsia (ASW) (98); Malaysia Airlines (MAS) (68);

Kuching (KCH): 971 km: AirAsia (ASW) (91); Malaysia Airlines (MAS) (49).

Starting with a fleet of two airplanes, Malindo Air (MXD) expects to have 12 737-900ERs in operation within a year, with further domestic routes to Bintulu, Miri, Sandakan and Sibu already listed as “Coming soon” on the airline’s website. However, with a fleet of 737-900ERs, international destinations are also envisaged, with China and India high on the airline’s priority list.

Malindo Air (MXD) is being conceived as less a low cost carrier (LCC) and more a "value airline." Operating from (KLIA)’s main terminal and having a business class (C) product on its airplanes suggests that Malindo Air (MXD) is trying to position itself somewhere between AirAsia (ASW) and Malaysia Airlines (MAS).

Economy (Y) class has 32 inch seat pitch, with 15 kg baggage allowance.

Business (C) class has 45 inch seat pitch, with 30 kg baggage allowance.

Each seat will have the option of individual in-flight entertainment (for a fee) and there will apparently be some free meal service. The airline’s slogan of “Not Just Low Cost” further highlights the airline’s attempt to position itself as a value airline rather than a pure (LCC).

Malindo Air (MXD), the Lion Air (MLI)-backed Malaysian airline, which received its (AOC) only two weeks ago, inaugurated its operations with the launch of two domestic routes on March 22 and 23, respectively. The start-up carrier now connects the Malaysian capital, Kuala Lumpur (KUL), with both Kota Kinabalu (BKI) and Kuching (KCH). Thrice-daily departures are operated on the first route, on which (MXD) competes against AirAsia (ASW) (105 weekly frequencies) and Malaysia Airlines (MAS) (74), while four-daily flights are offered to Kuching. In the latter market, Malindo Air (MXD) also faces competition from AirAsia (ASW) and Malaysia Airlines (MAS), which operate 98 and 69 weekly services, respectively. Flights on both routes are carried out using the airline’s fleet of 737-900ERs, which is expected to reach 100 units within a 10-year period.

Indonesia’s Lion Air Group has placed a firm order with Airbus (EDS) for 234 A320 family airplanes, comprising 109 A320neos, 65 A321neos and 60 A320ceos. This is Lion Air (MLI)’s first Airbus (EDS) order.

SEE ATTACHED - - "MLI-2013-03 - A320neo ORDER."

(MLI) will use the airplanes to meet growth requirements on its expanding domestic and regional route network.

The Group’s co-Founder & (CEO), Rusdi Kirana said, “This landmark order will ensure that the Lion Air Group will continue its expansion with one of the most modern and advanced fleets in the world.”

The Lion Air Group flies to more than >70 destinations in Indonesia and Southeast Asia.

April 2013: ACCDT: On April 13th, a Lion Air (MLI) 737-8GP (CFM56-7B26E) (38728, /13 PK-LKS) delivered only two months ago, landed in the sea, short of runway 09 at Bali's Denpasar-Ngurah Rai Bali International Airport in Indonesia. All 108 on board survived the accident which occurred at around 3.30 pm local time. The 737-800, with 101 passengers and 7 crew on board, was operating Flight JT-904 from Bandung. According to Denpasar airport, weather data for the time of the crash, the wind was light at only around 6 kts and variable, blowing between 110 deg and 270 deg.

SEE ATTACHED - - "MLI-2013-04 - ACCDT 737-800-A/B/C."

There was also unlimited visibility and a few cumulonimbus and scattered clouds at around 1,700 ft. According to a report on the Flight Safety Foundation’s Aviation Safety Network, eyewitnesses said rain was in the area of the approach to the runway as the 737 made its descent towards the airport. The 737-800 was powered by the newly-upgraded (CFM56-7BE) engine variant.

The USA National Transportation Safety Board (NTSB) is sending a team of investigators to assist the government of Indonesia in the investigation of Saturday, April 13th’s Lion Air (MLI) 737-800 crash. The airplane crashed on approach to Denpasar-Ngurah Rai Bali International Airport in Indonesia and landed in shallow water, injuring 45 of the 108 people on board. There were no fatalities.

On Monday, April 15th, Transport Minister, Evert Erenst Mangindaan said the airplane’s cockpit voice recorder (CVR) has been found and is being retrieved, according to "Bloomberg."

Indonesian investigators indicate that the crew of the Lion Air (MLI) 737-800 continued to descend below minimum altitude despite not having visual contact with the runway during a non-precision approach to Bali.

The National Transportation Safety Committee, in its preliminary report into the April 13th accident, said the first officer, who was flying, mentioned that the runway was not in sight as the airplane descended through 900 ft.

Although the airplane's automated systems issued a "minimum" warning at 550 ft, the flight crew (FC) disengaged the autopilot and autothrottle, and continued the descent.

Within a minute, the 737 had descended to just 150 ft and the captain (FC) took control of the airplane, while the first officer again said that he could not see the runway. The enhanced ground-proximity warning system called a 20 ft height alert and the pilot (FC) commanded a go-around but, just 1 sec later, the airplane impacted the water.

Approach charts showed the missed-approach point as 2 nm west of the Bali (VOR), giving the altitude as 465 ft.

While the 737 was severely damaged as it struck, short of runway 09, all seven crew (FC & CA) and 101 passengers survived, although four passengers were seriously injured.

The (NTSC) said the 48-year old Indonesian pilot (FC) had logged 15,000 hrs in total, with 7,000 hrs on the type, but the 24-year old Indian co-pilot (FC) had 1,200 hrs and 923 hours on type.

Surveillance camera images indicate it was raining at the time of the ill-fated airplan's approach. Indonesian investigators have sought additional information from other pilots (FC) about weather conditions at the time. A pilot (FC) holding short of runway 09 corroborated that it was raining, with visibility reduced to 1 - 2 km, and he was unable to see the 737 when his collision-avoidance system informed that the flight was 3 nm away.

Another crew, approaching the airport 5 nm behind the (MLI) jet, stated that they could not see the runway at the published minima and decided to execute a go-around.

Flight JT904 from Bandung appeared to be uneventful until the final seconds. The (NTSC)'s timeline of the accident read as follows:

06:48UTC: While 80 nm from Bali (VOR), the pilot (FC) made first contact with the Bali controller. The flight was cleared for descent to 17,000 ft.

06:52: The pilot (FC) was cleared to descend to 8,000 ft and proceed to the Kuta waypoint, which lied west of runway 09 over the sea.

06:59: The airplane was vectored for a (VOR)/(DME) approach for runway 09, and cleared to descend to 3,000 ft.

07:04: The pilot (FC) told Bali tower that he was leaving the Kuta waypoint. The tower told the crew (FC) to reduce speed to ensure sufficient separation with another airplane.

07:08: The Bali tower saw the (MLI) 737 on final and gave clearance to land, informing the pilot (FC) of a 5 kt wind from the south-east.

07:08:56: At a height of 900 ft, the first officer said he was unable to see the runway.

07:09:33: The enhanced ground proximity warning system called "minimum" at 550 ft. The pilot (FC) disengaged the autopilot and autothrottle and continued to descend.

07:09:53: The Captain took control at 150 ft, and the first officer said he could not see the runway.

07:10:01: The Ground-proximity system called "twenty" and the captain ordered a go-around, but the airplane hit the water short of the runway. The 737 came to rest 20 m from shore and 300 m southwest of the beginning of runway 09.

Later in September 2014, the following conclusions on this accident were provided:

"Pilot errors blamed for 2013 Lion Air Jet Crash in Indonesia."
By Andy Pasztor Connect

The Lion Air (MLI) 737 crashed in the water after missing the runway at Denpasar, Bali, in April 2013. Reuters.

The accident underscores issues safety experts say continue at fast-growing asian aviation markets.

The 737 was on a domestic flight in April 2013, according to investigators.

Pilots (FC) of the Lion Air (MLI) Boeing 737 descending to land at Bali failed to adequately communicate with each other or properly monitor their position during an approach in stormy weather, according to the final report released recently by Indonesian authorities. The flight crew (FC) descended much too rapidly and ended up too low without seeing the airport, and then waited too long to try to climb away from the strip, the investigation concluded.

No one was killed in the crash, but four passengers were seriously injured as the airplane, which was only two months old and had no malfunctions of any kind, broke apart after slamming into the ocean less than a quarter of a mile short of the strip.

The accident has underscored shortcomings in training and cockpit discipline, issues that safety experts say continue to surface at various carriers serving fast-growing aviation markets in parts of Asia and elsewhere.

The report said the flight crew (FC) exhibited "inadequate situational awareness" and failed to properly control the airplane's speed using engine adjustments and its descent by changing the angle of the nose.

Investigators concluded that the flight crew (FC) failed to adhere to "the basic principles of jet flying."

The report, among other things, notes that at an altitude of roughly 200 feet the co-pilot (FC) indicated it was "totally dark" as the plane entered an intense patch of rain and his view of the airport was completely obscured by the storm cell. But the report indicates the captain (FC) didn't try to break off the approach until the plane was about 20 feet above the ground, a point at which it is virtually impossible to rev up the engines and climb away safely. The crash occurred a second later.

Typical airline safety procedures (buttressed by landing guidelines developed by international safety groups) require a go-round hundreds of feet higher, if the strip isn't in sight.

In this case, according to investigators, the cockpit-voice recorder (CVR) indicated the co-pilot (FC) said he didn't see the runway starting from a height of 900 feet. The report indicates the captain (FC) opted to press on with the descent, expecting to see the strip any second.

Years before the crash, according to the report, a trainer emphasized the captain (FC)'s habit of continuing to descend and land during simulator sessions even if he violated mandatory criteria for "stabilized approach."

During the accident flight, the relatively inexperienced co-pilot (FC) handed over the controls to the captain (FC) shortly before the crash. The plane's nose was pointed slightly downward just before impact, rather than pointing slightly up as required by flight manuals.

In addition, investigators said the co-pilot (FC) mistakenly attempted to evacuate passengers using one of the cockpit windows.

The preliminary report issued in May 2013 urged Lion Air (MLI) to ensure its pilots (FC) are properly trained in "changeover of control at critical altitudes and critical time."

Lion Air (MLI) has become Indonesia's largest airline and one of the fastest-growing carriers in the world by rapidly rolling out new low-cost carrier (LCC) service across the Indonesian archipelago.

In the wake of the crash, (MLI) enhanced its training, focusing particularly on manual flying skills and decision-making during landing approaches.

According to the final report, the weather was clear four minutes before the accident but changed quickly.

The report includes recommendations dealing with more-effective ways to pass on the latest weather information, along with stepped-up pilot (FC) training. It also urges enhanced training for cabin crews in evacuating an airplane.

Batik Air (BTK), the full-service subsidiary of Lion Air (MLI), inaugurated its operations on 26 April with the launch of two domestic routes from Jakarta (CGK). (BTK), which was conceived to challenge Garuda Indonesia (GIA), now offers daily services on the route to Balikpapan (BPN) in eastern Borneo, and twice-daily to Manado (MDC) in North Sulawesi. Both destinations are served with 737-900ERs. Competition on the route to Borneo comes from Garuda Indonesia (GIA) (57 weekly flights), Lion Air (MLI) (56), Citilink (21) and Sriwijaya Air (SJA) (14), while in the market from Jakarta to Manado, Batik Air (BTK) faces Lion Air (MLI) (28) and Garuda Indonesia (GIA) (14).

May 2013: Lion Air (MLI)'s full service domestic subsidiary, Batik Air (BTK) now serves eight domestic destinations with flights featuring greater legroom, business (C) class and economy (Y) class service, with in-flight meals and entertainment.

(MLI)'s full service subsidiary, Malindo Air (MXD) will begin turboprop operations out of Kuala Lumpur's secondary Subang airport in June. The first turboprop, an ATR72-600 (1081, 9M-LMF), arrived on May 20th 2013. (MXD) plans to operate six ATR72-600s by the end of the year, which will come from the order book of Lion Air (MLI) regional subsidiary, Wings Air (WON).

On June 3rd, (MDO) will launch twice daily, Subang - Johor Bahru, Subang - Kota Bharu and Subang - Penang services. It will compete with Malaysia Airlines (MAS)'s subsidiary, Firefly (FFM) on the three routes. Malindo (MXD) has taken delivery of its third 737-900ER airplane, and will receive its fourth at the end of May. The airplane will be deployed on services from Kuala Lumpur to Sibu, Miri, and Tawau, starting June 11th, 14th and 26th, respectively.

Malindo (MXD), a joint venture between Indonesia's Lion Air (MLI) and Malaysia's National Aerospace and Defence Industries, started operations on March 22nd with services from Kuala Lumpur to Kuching and Kota Kinabalu. (MXD) is also slated to receive five 787-8s ordered by (MLI) in 2012, and plans to grow its fleet to 100 airplanes within 10 years.

737-8GP (38691, PK-LKU), ex-(PK-LLH), delivery.

July 2013: New Kuala Lumpur-based, Malindo Air (MXD) will begin international services next month, when it launches a daily, non-stop flight to Dhaka, Bangladesh. The Kuala Lumpur - Dhaka flights will begin August 28 using 737-900ERs. “Malindo Air (MDO) plans to enhance Kuala Lumpur International Airport’s footprint as a key regional gateway to the (ASEAN) region. (MXD)’s immediate expansion plan includes flights from Kuala Lumpur to Bali, Jakarta, Medan and the island of Batam.

Kuala Namu Airport, Medan’s new replacement for Polonia International Airport in Sumatra, is up and running. Lion Air (MLI) and Garuda Indonesia (GIA) are the two busiest airlines at the new Kuala Namu International Airport, Medan which opened on July 25, replacing the Polonia International Airport, the main airport previously serving Medan in North Sumatra. Over >8 million passengers are expected to pass through the new airport in the first 12 months.

While major cities such as Berlin and Doha struggle to get their splendid new airports up and running, a city in Indonesia has managed to get its new airport opened with relatively little trouble (or fanfare). Medan, on the Indonesian island of North Sumatra, closed its old Polonia International Airport (MES) on July 24, and the following day, services began at the new Kuala Namu Airport (KNO). Work on the new airport began back in 2006, so it hasn’t exactly been completed rapidly, but all flights transferred to the new facility overnight. The new airport is some 45 km away from downtown Medan, but is served by the country’s first rail link to an airport.

Since 2000, passenger numbers at the old airport grew from just over >1 million per annum, to almost 8 million in 2012. The new airport has the potential to be able to handle at least three times as many passengers, although the first phase of the development is designed to handle around 9 million passengers.

SEE ATTACHED - - "MLI-2013-07 - MEDAN AIRPORT GROWTH."

Analysis of schedule data for the old airport in June, shows that Lion Air (MLI) is by far the busiest carrier at the airport, with over >30 daily departures spread across nine destinations. In fact, (MLI) has as many weekly flights to Jakarta (133) as the next busiest airline, Garuda Indonesia (GIA), has to all of its destinations combined. SEE ATTACHED - - "MLI-2013-07 - AIRLINES SERVING MEDAN."

Although the vast majority of services are currently domestic, the new airport also offers flights to nearby Malaysia and Singapore, as well as Bangkok (Thailand) and Colombo (Sri Lanka). With a modern terminal, a long runway, and a rapidly growing demand for air travel, it may not be too long before one of the big Middle East hub carriers considers serving the airport (bilateral agreements permitting).

August 2013: Lion Air (MLI) established its new Bandung (BDO) to Kuala Lumpur (KUL) service on August 19. The rapidly expanding carrier, which commenced operations at the turn of the millennium, has started the 1,250 km sector using 737-800s. Bandung to Kuala Lumpur is the fourth service to Malaysia for (MLI), and the third to the Malaysian capital. (MLI), who launched the route with daily frequency, now competes with Indonesia AirAsia (AWR) which offers daily rotations, and AirAsia (ASW) which markets three daily flights.

Lion Air (MLI) and Garuda Indonesia (GIA) have helped Indonesia to replace China as the fastest growing Asian air travel market. The latest edition of Boeing (TBC)’s annually updated "Current Market Outlook" (2013 - 2032) predicts that demand (as measured by Revenue Passenger Kilometers (RPK)s in the Asia-Pacific region will grow by an average of +6.3% per annum during the next 20 years, and that by 2032 the region’s airlines will account for over one-third of the world’s fleet of commercial airplanes, up from around 24% at present.

Last year, when one looked at what was happening to Asia’s leading airlines, airports and country markets, the analysis was dominated by China’s growth, which far exceeded that of the rest of Asia. So what has changed 12 months on?

Using schedule data provided by the airlines to "Innovata," a comparison has been made between the months of August 2012 and August 2013, for all the airports designated as being in Asia. Since last year, the biggest change has been that the airlines comprising the AirAsia (ASW) group, have passed Japan Airlines (JAL)/(JAS) to break into the top 5 in the region. Hainan Airlines (HNA) and Shenzhen Airlines (SHZ), both moved up a place in the top 10, as Korean Air (KAL) dropped two places to number 10.

Of the top 30 airlines, just three (Korean Air (KAL), Cathay Pacific (CAT) and Shanghai Airlines (SHA)) have reported a drop in monthly seat capacity. New entrants in the top 30, are Tianjin Airlines (GCR) (at number 28), and Beijing Capital Airlines (DER) (at number 30). They replace Philippine Airlines (PAL) and Spring Airlines (CQH). Tianjin Airlines (GCR) is also the fastest-growing in the top 30, reporting an increase in monthly seat capacity of just over >+42%.

SEE ATTACHED - - "MLI-2013-08 - TOP 30 AIRLINES IN ASIA BY ASK."

After the recent problems in the Indian market, it is good to see both Jet Airways (JPL) (+4.3%), and Air India (AIN)/(IND) (+13.0%) growing once again, joining IndiGo (IGO) (+19.1%) and SpiceJet (ROJ) (+14.4%), as the Indian market appears to be regaining some growth momentum. It is worth noting that although all of the top 30 airlines are, not surprisingly, based in the region, Dubai-based Emirates (EAD) ranks only just outside the top 30, in 33rd place.

In 2012 China’s airports handled just over >680 million passengers, +9.5% more than in 2011. (CAAC) (CAC) data for the first half of 2013 indicates that Chinese airlines have carried around +11% more passengers than in the same period in 2012. Capacity growth at Chinese airports in August of this year is just over >+12%. Whereas last year, China’s capacity growth was higher than for any other country in the top 12, this year it ranks only fifth by that measure, behind Indonesia, Malaysia, Vietnam, and Thailand. Indonesia’s rapid growth has enabled it to move up to third place, pushing India down to fourth. Malaysia has benefited from the arrival of Lion Air (MLI)’s Malaysian partner airline, Malindo Air (MXD), which launched services this year.

SEE ATTACHED - - "MLI-2013-08 - TOP 12 ASIAN SUMMER MARKETS."

Japan and India both report growth of between +8% and +9%, while South Korea (+1.5%) and Taiwan (+0.6%) are the slowest growing major Asian country markets.

Asia’s top 30 airports account for around 53% of all scheduled seat capacity across Asia, but although capacity was up +8.6% at these airports, capacity across all other airports combined was up almost double, at +15.0%. Among the top 10 airports, Beijing (PEK)’s capacity is up less than <+2%, while seat capacity at Bangkok’s main airport is down just over -2%, as a number of carriers have been allowed to transfer flights back to Bangkok’s older Don Mueang airport. Jakarta’s rapid growth (+20%) has seen it move past Hong Kong into third place.

The two fastest-growing airports in the top 30 are Kunming in China (+43.7%), and Surabaya in Indonesia (+37.9%), which is also the only new entry in the rankings, replacing Urumqi in China. India only has two airports in the top 30 (compared with 11 for China and six for Japan), but both Delhi (+8.5%) and Mumbai (+12.2%) are once again growing.

SEE ATTACHED - - "MLI-2013-08 - TOP 30 ASIA AIRPORTS."

Lion Air (MLI) is targeting Singapore Aircraft Maintenance demand and
plans to build a $250 million maintenance repair & overhaul (MRO) facility on an island that is a 45-minute ferry ride from Singapore, in a plan to eventually grab some of the city-state's bustling business for repairing airplanes.

Indonesia’s Lion (MLI) Group intends to expand its Wings (WON) Flying School and Lion Training Center in Jakarta and is seeking international training partners as part of the growth plan.

Lion Group President, Rusdi Kirana said the Lion Group would like to partner with internationally certified training organizations that have European Safety Agency and/or (FAA) certification. He said the joint ventures that the Lion Group forms would serve the training needs of the Lion Group and third-party airline customers.

The Lion Group’s subsidiaries include Lion Air (MLI), Wings Air (WON) and Batik Air (BTK). Lion Air (MLI) is Indonesia’s largest airline and mostly operates 737-900ERs and 737-800s. Wings Air (WON) is the largest turboprop operator in Indonesia, with a fleet of ATR72-500s and ATR72-600s. Batik Air (BTK) is Indonesia’s newest full-service carrier, with a fleet of 737-900ERs.

The Lion Group also owns 49% of Malaysian carrier Malindo Air (MXD), which operates 737-900ERs and ATR72-600s.

In July, Lion (MLI) placed a firm order for 20 Cessna 172 trainer airplanes for its Wings (WON) Flying School. It also has options for 20 more Cessna 172s. The Wings (WON) School expects to take 60 - 70 graduates this year and around 150 graduates next year.

The Lion (MLI) Training Center added its third 737-900ER full flight simulator (FFS) in July. It also has one ATR72-500 simulator. Lion (MLI)’s simulator center is at Lion Village, near Jakarta’s Soekarno-Hatta International Airport, and has seven instructors.

Kirana said land at Lion Village has been set aside so the simulator center can expand to accommodate up to 21 simulators. “These will be a mix—different simulators for different airplane types. But there will be some A320 simulators, as the Lion Group has A320 airplanes on order with the first due to be delivered in next year’s second half,” he said.

Flight Training centers are on a growth trajectory. In July, (ANA) announced it was buying Pan Am Holdings, which includes the Miami-based Pan Am International Flight Academy.

September 2013: Lion Air (MLI) is looking to fill “thin” routes with Bombardier (BMB)’s C300 jets, as it challenges Malaysia’s AirAsia (ASW) in Southeast Asia’s quick-growing market for budget travel.

(CEO), Rusdi Kirana told "Reuters" (MLI) is in talks to buy a “double-digit” number of C300s, rather than more narrow-body Boeing 737s or Airbus A320s, because their size offers lower operating cost per trip on so-called thin routes where passengers don’t quite fill the larger planes.

(MLI) is considering issues such as after-sales support, and could place an order by the end of the year, a spokesman said.

(MLI) has been on a shopping spree as it looks to capitalize on Indonesia’s rising consumer class who are increasingly hopping between myriad islands of the world’s fourth-most populous country, whilst it competes internationally with the likes of AirAsia (ASW).

(MLI) has a fleet of 737s and ATR’s 72-seat ATR72, and has over >500 A320s and 737s on order. Another airplane type will add only “minimal” cost, (CEO) and co-founder Kirana said after visiting a CSeries factory at Mirabel, Quebec.

The CS300, which has a list price of around $80 million, can seat up to 160 passengers. This makes it ideal for routes where demand isn’t enough to fill the 189 seats of a 737-800, but exceeds the capacity of an ATR72, a spokesman said. The plane is suitable for routes such as Southeast Asia to Hong Kong or Guangzhou, as well as for domestic Indonesian routes.

“Definitely we are in discussions with them, so hopefully we’ll be able to finalize a deal in a few months,” said Marc Duchesne, Director Public Affairs & Communications for Bombardier (BMB)’s Commercial Aircraft division.

Lion Air (MLI) is increasing its international scope by setting up affiliate airlines. It owns 49% of Malaysia’s Malindo Air (MIX) and hopes to set up a Thai joint venture this year with two airplanes, increasing that to around 70, said Kirana.

It is creating a second hub on the Indonesian island of Batam near Singapore, to avoid congestion at Jakarta’s main airport, Kirana said. It is also building a large maintenance, repair and overhaul facility at Batam’s airport.

Kirana also said the airline is on track to list on the stock exchange in 2015, and that he wants more time to weigh market dynamics and “the liquidity of money in the world.”

Indonesia’s Lion Group, parent company of Lion Air (MLI), is building a Maintenance Repair & Overhaul (MRO) facility on Indonesia’s Batam Island. To be called "Batam Aero Technic," the new (MRO) center will handle heavy maintenance for Lion Group airlines, as well as heavy checks for third-party customers.

Batam Aero Technic will have four wide body hangars, component repair and overhaul shops, as well as an engine (MRO) center that will include a test cell. Construction of the four hangars has begun, with the first two due for completion by year end, and the remaining two by the end of June 2014. Each hangar will be able to accommodate either one 747-400 or three 737-900ERs simultaneously.

Once certified by Indonesia’s Directorate General of Civil Aviation (DGCA), Batam Aero Technic aims to open by year end, handling 737 airframe heavy maintenance checks. These will complement the Lion Group’s existing heavy maintenance services at Surabaya’s Juanda International Airport. Construction of the component shop and engine overhaul facility has not yet begun. When fully operational, the new facility is expected to have a 2,000-strong workforce.

In addition to airframes and engines, Batam Aero Technic is also expected to work on major airplane systems, such as landing gears, avionics and auxiliary power units in the future. The Lion Group selected Batam for the new (MRO) center because there is available land close to the island’s Hang Nadim International Airport, which has a 4,000-m runway capable of handling airplanes as large as the A380. In addition, the close proximity to Singapore, means the (MRO) “can tap Singapore’s world-class logistics network, facilitating the flow and access to spare parts needed for repairs.”

In addition to (DGCA) certification, Batam Aero Technic is targeting European Aviation Safety Agency (EASA) certification as well, ensuring the facility can handle both Indonesian and foreign registered airplanes.

November 2013: Thai Lion Air is preparing to launch services in Thailand on December 4. "Routes News'" sister blog, airlineroute.net reported that tickets were on sale for two daily flights from Bangkok Don Mueang to Chiang Mai and Jakarta, as well as a daily service to Kuala Lumpur. The airline plans to operate new 737-900ERs on the routes. It was granted its operating licence by the Thai authorities.
The airline is a subsidiary of Indonesia’s Lion Air Group, one of the fastest growing airlines in Asia-Pacific.

Boeing [TBC] and the Lion (MLI) Group, Indonesia’s largest airline group, commemorated the delivery of (MLI)’s 100th Next-Generation 737 at a special event. “This is an amazing moment for the Lion Group,” said Lion Group President Director, Rusdi Kirana. “We’ve grown from one airplane and today, we’re taking our 100th Next-Generation 737. It’s an airplane that has allowed us to grow and be successful because of the low operating cost and passenger comfort.”

The Lion Group’s 100th airplane, a 737-900ER (Extended Range) features a special livery commemorating the delivery.

Lion Air (MLI), which was established in 1999, was also the launch customer for the 737-900ER. (MLI) mainline currently operates 67 737-900ERs and 19 737-800s. The group’s other Next-Generation 737s are allocated to its full-service carrier in Indonesia, Batik Air (BTK), and to its overseas affiliates: Malindo Air (MXD) in Malaysia and Thai Lion Air, a new (MLI) subsidiary carrier based in Bangkok.

December 2013: Lion Air (MLI) has added a new domestic route in the Indonesian market. On December 6th, (MLI) launched daily flights between Batam (BTH) and Balikpapan (BPN). The 1,445 km route will be served by (MLI)’s 737-800s, and will not face direct competition from any other carrier.

Thai Lion Air, the new Bangkok-based subsidiary of Indonesia’s Lion Air, has launched its first route from Bangkok Don Mueang (DMK) to Chiang Mai (CNX). It will serve the 565 km domestic route with thrice-daily flights, but faces intense competition from Thai AirAsia (THA) (12 daily flights) and Nok Air (NKA) (10 daily flights). Flights will be operated by the airline’s 215-seat 737-900ERs.

2 737-9GPER (38742, PK-LBJ; 38743, PK-LBI), leased to Batik Air (BTK).

January 2014: The Lion Group has selected (CFM) International’s (CFM56-5B) engine to power 60 Airbus A320ceo airplanes ordered in March. (CFM) said the engine order’s list price value is $1.2 billion.

The Lion Group, which also operates Wings Air (WON), is a long-time (CFM) customer.

Lion Air (MLI) also has more than >200 Boeing 737 MAXs and 737-900ERs on order, with deliveries scheduled to begin in 2017, which will be powered by (CFM) engines.

The Lion Group also announced that Batam will become its second major hub after Jakarta. The group in recent months has increased the number of domestic destinations it serves from Batam to 15 and aims to eventually serve 20 domestic destinations in Indonesia from Batam.

Lion Air (MLI) will, for example, be launching a daily non-stop service January 29 from Batam to Pontianak using Boeing 737-800s and it also aims to launch a Batam - Makassar and Batam - Bali Denpasar service. Developing Batam as a hub helps to relieve congestion at Jakarta Soekarno-Hatta International Airport. “Batam is ideally located for people wishing to travel between eastern and western Indonesia. The distance is actually shorter if you transit in Batam rather than flying further south to Jakarta to transit,” Lion Group President, Rusdi Kirana said.

“This is a ‘win-win’ for consumers and for the airline. The shorter flying time makes flying more convenient for passengers and it means airplanes burn less fuel, leading to significant cost savings.”

In 2015, the Lion Group plans to launch international services from Batam. Overseas destinations being considered include points in southern China such as Guangzhou and Hong Kong, Bangkok and Jeddah, New Delhi, and Mumbai.

Lion Air (MLI) said it planned to cancel an order for five 787 Dreamliner airplanes and replace them with smaller 737 models. (MLI) first announced the order, worth $1 billion at list prices, in mid-2012 for its premium subsidiary Batik Air (BTK).

Industry sources said the five 787 Dreamliners ordered by (MLI) were early production models which had been sold at discounts well above 50% due to their extra weight and modifications carried out after leaving the production line.

Despite ongoing reliability problems on some 787s, such airplanes could be attractive to other budget carriers due to their low prices, market sources said. One such potential customer is Norwegian Air Shuttle (NWG), which has said it is looking for more 787s despite complaining about teething problems in 787s it already owns.

Indonesian Aerospace (IAe) is embarking on the development of a 19-seat turboprop, the N219, which could compete with the Viking Twin Otter and China’s Harbin Y-12F.

The N219 is the first indigenous airplane to be developed in Indonesia since the (IPTN) N250 50-seat turboprop in the 1990s. The plan is to fly a first prototype of the N219 in 2015, and gain certification with Indonesian authorities in 2016. International certification will follow later.

The program has already generated considerable interest in Indonesia. Low-cost carrier (LCC), Lion Air (MLI) has signed up for 50, with options for a further 50, to provide feeder services around the country. Nusantara Buana Air (NBA), a small regional carrier in Western Indonesia, has signed a Memo of Understanding (MOU) for 20 N219s with options for a further 10.

Market studies for the 19-seater began back in 2006 and the program is now fully backed, with development expected to cost around $80 million. (IAe) believes the airplane can serve remote Indonesian destinations inaccessible by roads.

Detailed design is currently underway, with designers looking to improve on the Twin Otter’s performance by increasing the height and the width of the cabin, allowing three-abreast seating with a 32-inch pitch for the 19 seats. The N219 will have a payload of 2,313 kg/5,000 lbs. (IAe) has selected Pratt & Whitney Canada (PWC) (PT6A-42) engines and the Garmin 950 avionics suite.

The company is currently building a new hangar and production facilities for the N219 at its Bandung plant. Initial plans are to build 12 a year, later expanding to 24 a year.

Two prototypes of the N250 were built and completed 800 flying hours before funding from the Indonesian government was halted during the Asian economic crisis in 1997. But (IAe) engineers are using experience from that program to develop the N219.

3 737-8GPs (38744, PK-LOH; 38746, PK-LOI; 38747, PK-LOJ), deliveries.

March 2014: Lion Air (MLI) has appointed Rudy Lumingkewas as its new (CEO), succeeding Lion Group Founder, Rusdi Kirana.

Lumingkewas was formerly Lion Air General Manager Sales & Marketing.

The move was prompted by the need to let Kirana “better divide my time between the airlines in the group and take the group forward in the next phase of its development,” he said.

Lumingkewas has been with the Lion Group since 2001, when he joined as a Lion Air (MLI)'s District Manager in Medan. He said his new focus will be to continue to concentrate on growth and market share for (MLI). “My focus will [also] be continuing to invest in training, so that our workforce can continue to develop and grow,” Lumingkewas said, adding that route expansion and greater connectivity will also be high on his agenda.

Lion (MLI) said that the fact it has filled the new (CEO) post by promoting from within is “testimony to the strength of our management team,” although Kirana is well known for his reluctance to widely share information on internal policy or plans with outsiders.

Lumingkewas is described by Kirana as “an instrumental part of (MLI)’s management team” and “having a thorough knowledge of the business.”

Kirana will take the reins full time as (CEO) of the Lion Group, a role he previously shared 50-50 working as (CEO) of Lion Air (MLI).

April 2014: Lion Air (MLI) will lease five 737s (comprising four 737-800s and one 737-900ER) from Bank of China subsidiary, BOC Aviation (SIL). Deliveries are scheduled for this year and in 2015.
(BOC) Aviation (SIL) said the deal builds on the success of the November 2012 transaction for six 737-800 and three 737-900ER airplanes.

Avolon (AZV) delivered the final of six Boeing 737-800NGs to Lion Air (MLI) as part of a sale and leaseback agreement.

May 2014: Lion Air (MLI) has an opportunity to win back market share in Indonesia’s dynamic low-cost carrier (LCC) sector as competitors slow their expansion and in some cases reduce capacity. (MLI) in 2013 recorded the lowest rate of traffic growth among Indonesia’s four (LCC)s as its share of the Indonesian (LCC) market dropped from over >78% in 2012 to about 71%.

Indonesia AirAsia (AWR), Garuda Indonesia (GIA) budget subsidiary Citilink (CNK) and Tigerair Mandala (MND) all gained market share as they expanded more rapidly than Lion (MLI), albeit from much smaller bases. But Indonesia AirAsia (AWR) and to a lesser extent Citilink (CNK) are slowing expansion in 2014, while Tigerair Mandala (MND) has cut capacity.

Lion (MLI) also has quietly slowed its growth by retiring 737 Classics and switching 737-900ER orders to smaller 737-800s. But (MLI) has not followed rival (LCC) groups AirAsia (ASW) and Tigerair (TGR) in deferring or cancelling orders. The group will account for about three quarters of the airplanes being delivered to Indonesia’s (LCC) sector in 2014, putting it in position to make market share gains.

Avolon (AZV) delivered a Boeing 737-800NG to Lion Air (MLI) on May 6. This is the first delivery of a six airplane sale and leaseback deal with Lion Air (MLI), which includes four Boeing 737-800NGs and two Airbus A320-200s.

Airbus (EDS) announced the Lion Group’s first A320 has entered the final assembly line (FAL) in Toulouse. The A320, which will be delivered in the third quarter, will be operated by the Lion Group’s Batik Air (BTK) on its growing domestic and regional network. The A320 is the first of a major order placed by the Lion Group in March 2013 for 234 A320 family airplanes, comprising 109 A320neos, 65 A321neos and 60 A320ceos.

2 737-8GPs (39815, PK-LOP); Avolon leased (39816, PK-LOQ), (AWAS) (AWW) leased.

June 2014: The Lion Group’s first Airbus A320 has rolled out of the paint shop hangar in Toulouse, France - - SEE PHOTO - - "BTK-A320-2014-06." The A320 will be delivered in the third quarter and will be operated by the Lion Group’s full service unit, Batik Air (BTK) on its growing domestic and regional network. The A320 is the first from a major order placed by the Lion Group in March 2013 for a total of 234 A320 Family airplanes (109 A320neo, 65 A321neo and 60 A320ceo).

July 2014: The Lion Air Group’s pace of expansion is about to accelerate as it takes delivery of its first A320 and increases its 737 delivery rate. The group plans to add over >30 airplanes in second half (2H) 2014, as it increases its overall average monthly intake from three to five airplanes (a rate it will maintain in 2015, resulting in a staggering 60 deliveries next year).

At the same time, the AirAsia Group is slowing its fleet expansion, particularly in the Southeast Asia market. AirAsia (ASW) is growing its Southeast Asian fleet by only six airplanes in (2H) 2014, and may not add any airplanes in 2015 as the focus will be on spooling up new affiliates in India and Japan.

If Lion (MLI) does not follow (ASW) in slowing down growth in Southeast Asia, it will quickly shoot past AirAsia (ASW). There is a risk market share gains will come at the expense of yields and profitability as several Southeast Asian markets are already suffering from overcapacity (but there is a larger strategic game being played out now).

(ASW) and (MLI) operate over >300 aircraft (with almost another 900 on order).

The AirAsia (ASW) and Lion (MLI) groups (excludes AirAsia X (ASX)) currently account for about 60% of Southeast Asia’s low cost carrier (LCC) fleet and about 20% of the total Southeast Asian fleet. The two groups also have nearly 900 airplanes on order, which accounts for over half of the 1,600 airplanes on order by the entire Southeast Asian airline sector.

The rapid growth of AirAsia (ASW) and Lion (MLI) over the last decade have driven up the low cost carrier (LCC) penetration rate within Southeast Asia from about 4% in 2003 to almost 60% in (1H) 2014.

AirAsia (ASW) currently operates 159 single-aisle airplanes in Southeast Asia while Lion (MLI) has 150 airplanes in its single-aisle fleet (including 144 at (LCC) subsidiaries or affiliates and six at full-service subsidiary Batik Air (BTK)). These tallies exclude wide body airplanes (Lion (MLI) has two 747s while AirAsia (ASW)’s sister long-haul (LCC) group, AirAsia X (ASX) has a fleet of 20 A330s.

Southeast Asia’s wide body (LCC) segment is growing rapidly, but from a small base and competes in a market, which is relatively unpenetrated. The (LCC) penetration rate to and from Southeast Asia is still less than <20%. This report specifically analyses Southeast Asia’s short-haul sector and the planned growth rates of AirAsia (ASW) and Lion (MLI).

The Lion Air Group will have a larger fleet than the AirAsia Group by the end of 2014.

The AirAsia (ASW) - Lion (MLI) battle is now approaching a major fork in the road as the two groups adopt radically different growth strategies.

The AirAsia Group has significantly slowed down fleet expansion from (2H) 2014 to 2018 by deciding to sell existing airplanes and defer deliveries. Lion (MLI), meanwhile, has not elected to sell any airplanes or defer any deliveries. In fact, (MLI) is moving forward with implementing a longstanding plan to increase the pace of fleet expansion from (3Q) 2014.

Assuming (MLI) Lion takes all the airplanes it is slated to receive in (2H) 2014 and 2015, and assuming AirAsia (ASW) does not reverse any of its recent decisions to sell and defer airplanes, Lion (MLI) will quickly overtake (ASW) as a larger group. Even when removing Batik (BTK) airplanes from consideration (as (BTK) follows the full-service model), (MLI) will soon overtake (ASW).

(ASW)’s current fleet plan envisions an end of 2014 fleet across its four Southeast Asian affiliates of 165 airplanes, including 76 in Malaysia, 41 in Thailand, 30 in Indonesia, and 18 in the Philippines. This represents growth of only +7% compared to the 154 airplanes at the end of 2013 and growth of +4% compared to the 159 airplanes at the end of (2Q) 2014.

AirAsia Group fleet plan for Southeast Asia: 2014:

AIRLINE :::::2012::::::::2013:::::::1H2014 ::::::: 2H2014

AZW ::::::64 A320s :::72 A320s :::74 A320s ::::::76 A320s
THA ::::::27 A320s :::35 A320s :::37 A320s ::::::41 A320s
AWR ::::22 A320s :::30 A320s :::30 A320s ::::::30 A320s
APG*::::::::2 A320s :::17 A320s :::18 A320s ::::::18 A320s
TOTAL :115 A320s ::154 A320s ::159 A320s :::::165 A320s
Notes: *(APG) includes Zest AirAsia (RIT) from 2013;
AirAsia India (AAI) excluded.

Lion (MLI)’s fleet plan envisions an end of 2014 single-aisle fleet of 182 to 184 airplanes. This represents growth of +38% to +39% compared to the end of 2013 and growth of +21% to +23% compared to mid-2014.

(MLI)’s (LCC) fleet is expected to reach 166 to 168 airplanes at the end of 2014, putting it above the AirAsia (ASW) figure of 165. (The group has said Batik (BTK) will have a fleet of 16 airplanes by the end of 2014; it has not provided breakdowns for its other subsidiaries/affiliates, but as all its other subsidiaries/affiliates are (LCC)s the total (LCC) figure will be 166 to 168 airplanes).

Lion Air Group fleet plan: 2014:

Segment:::::End 2013 :::::End 1H2014 :::::End 2014
(LCC)s :::::96 737s :::::::108 737s,:::::122 to 124 737s
:::::::::::30 ATR72s :::: 36 ATR72s:::::44 ATR 72s
(BTK):::::::6 737s ::::::: 6 737s ::::::10 737s, 6 A320s
TOTAL :::::132 APLS :::::150 APLS ::::: 182 TO 184 APLS
Notes: Excludes Lion (MLI)'s two 747-400s.

The AirAsia Group plans to add only 10 airplanes in 2015, but has the ability to adjust.

The gap will widen further in 2015 as AirAsia (ASW) has deferred 19 of its 29 deliveries, originally slated for 2015, and will need to allocate its remaining deliveries to its new affiliates outside Southeast Asia. In fact, (ASW) may need to reduce the size of its Southeast Asian fleet in 2015 in order to free up more airplanes for start-ups AirAsia India (AAI) and AirAsia Japan (ASJ).

AirAsia India (AAI) launched services in June 2014, while AirAsia Japan (ASJ) plans to launch services in mid-2015. (ASW) is clearly focusing on short to medium term growth in India and Japan, as it seeks to diversify its portfolio and reduce its reliance on Southeast Asia.

Previously, AirAsia (ASW) was planning to add 31 airplanes in 2014 and 29 in 2015. A reduction of -19 airplanes for 2014 has been achieved by deferring 7 airplanes (announced in February 2014) and selling 12 airplanes (6 announced in February 2014 and 6 announced in May 2014).

(ASW) could potentially keep about half of the airplanes it was planning to sell in (2H) 2014 and instead move them to India as the group’s current fleet plan has only one airplane allocated to AirAsia India (AAI) for all of 2014. But such an adjustment will not impact the numbers for any of the Southeast Asian affiliates, which include two additional airplanes in (2H) 2014 for Malaysia and four additional airplanes for Thailand. The Indonesian and Philippine fleets are expected to be maintained at 30 and 18 airplanes, respectively, in (2H) 2014. (The Malaysia figure is a net figure as all 12 airplanes slated to be sold are coming from Malaysia, while the Malaysian unit takes most of the new deliveries).

AirAsia (ASW)'s -19 airplane reduction for 2015 was achieved purely from deferrals (-12 announced in February 2014 and -7 announced in May 2014). (ASW)’s May 2014 announcement also included deferring 6 of the 28 airplanes slated for 2016, 11 of the 31 airplanes for 2017, and 8 of the 32 airplanes for 2018.

These changes are relatively insignificant compared to the adjustments for 2014 and 2015, as the group is still planning to add at least 20 airplanes per annum in 2016 through to 2018 (compared to the much more conservative figure of 10 in 2015). There is also plenty of time for AirAsia (ASW) again to adjust its 2016 to 2018 delivery totals should market conditions warrant.

(ASW) may also still have some flexibility with its 2015 figures. An adjustment would be logical, given that since the deferrals were announced, the group has decided to launch a joint venture (JV) in Japan in 2015.

Even with an adjustment, the extra airplanes will entirely or almost entirely be allocated to Japan and India. The group’s Southeast Asian affiliates are not expected to see much, if any fleet growth in 2015.

AirAsia (ASW) slowdown is sensible but gives Lion (MLI) an opening.

Some investors have challenged AirAsia (ASW) for expanding too rapidly in Southeast Asia. There are still opportunities for further (LCC) growth in Southeast Asia as the region’s long-term economic outlook remains strong, and the region’s middle class continues to grow rapidly. But the capacity growth has exceeded the growth in demand over the last year, resulting in overcapacity. Virtually all carriers in the region have been impacted, as yields and load factors have been reduced.

Slowing down the pace of growth in Southeast Asia is sensible given the current challenging market conditions. Deferring A320s in 2014 to 2017 also has enabled AirAsia (ASW) to transition 26 of its A320ceo orders into A320neos. This is also a sound move given the significantly improved operating costs of the A320neo and the potential challenges of owning late model A320ceos, which many sources suggest could see a drop in values after the A320neo enters service.

But, on a strategic level, slower expansion in Southeast Asia will give an opportunity for rival Lion (MLI) to overtake (ASW) and quickly widen the gap.

Lion Air (MLI) plans to add 32 to 34 airplanes in (2H) 2014, from both Boeing (TBC) and Airbus (EDS).

Lion (MLI) plans to take delivery of 50 to 52 airplanes in 2014. Only 18 of these airplanes were taken in (1H) 2014 (12 737NGs (including 10 at Lion Air (MLI) and two at Thai Lion (TLM)) and six ATR72-600s (including five at Malindo Air (MXD) in Malaysia and one at Thai Lion Air (TLM)). The faster rate of deliveries in (2H) 2014 has been part of the Lion Group fleet plan for the past year.

The acceleration includes transitioning Lion (MLI)’s Boeing (TBC) delivery rate from two 737NGs per month to three 737NGs per month. (MLI) is expected to start taking three 737s per month from July 2014. Its fleet plan for 2014 envisions 30 to 32 737s (12 in the first half and 18 to 20 in the second half).

Meanwhile, the Lion Air Group plans to take delivery at the end of July 2014 of the first A320 from its landmark 234 airplane order, that it placed with Airbus (EDS) in early 2013. Lion (MLI)’s initial delivery rate from (EDS) is one airplane per month. This is expected to increase to two airplanes per month in a few years, as (MLI) starts to take the A320neo.

As previously outlined, the (MLI) group has allocated the six A320s which will be delivered in (2H) 2014 to Batik (BTK). The first airplane rolled out of the paint hangar at (EDS)’ Toulouse facility in mid-June 2014 and is currently waiting for the cabin to be installed. (Batik (BTK) is outfitting its A320s with the Lumexis in-flight entertainment (IFE) system),

The Lion Group is also continuing to add ATR72-600s at a relatively (although not quite as rapid) pace. In recent years, the (MLI) group has been taking an average of one ATR turboprop per month. The group has said it plans to take a total of 14 ATR72-600s in 2014.

The group took six ATR72-600s in (1H) 2014, five for Malindo (MXD) and one for Thai Lion (TLM), leaving it with eight deliveries in (2H) 2014. This includes the normal one airplane per month, plus two additional airplanes.

The Lion Group fleet is to reach about 225 airplanes by the end of 2015.

Lion (MLI) is expected to maintain a delivery rate of five airplanes per month (three 737s, one A320 and one ATR72-600) in 2015. This would give it 60 deliveries next year, boosting its single-aisle fleet total to about 225 airplanes at the end of 2015.

So far, the group shows no signs of even considering deferrals. As Lion (MLI) has already phased out its 737 Classics and MD-80s, there is little flexibility left in its fleet.

Airplane sales are also not likely for another couple of years as its oldest 737NGs were manufactured in 2007. (In comparison, AirAsia (ASW) began taking A320s in 2005, giving the group an opportunity to start replacing some of its older A320s.)

(ASW) and (MLI) have emerged as the dominant (LCC) brands in Southeast Asia.

The next one to two years will continue to be defining times for Southeast Asia’s dynamic (LCC) sector as (MLI) continues to expand at a breakneck pace while (ASW) slows down. While there are several other (LCC) players in Southeast Asia, (MLI) and (ASW) have undoubtedly emerged as the trendsetters.

SE Asia’s other (LCC)s are all now much smaller and combined operate about 100 airplanes, many less than the Lion (MLI) and (ASW) combination. The 2 other main (LCC) groups in the region, Jetstar (IMU)/(PAH) and Tigerair (TGR), are each subsidiaries or affiliates of full service airlines and part of more complex strategies. They each currently only have 25 airplanes based in SE Asia. Cebu Pacific (CEB), which is Southeast Asia’s biggest independent (LCC), is larger and currently has a fleet of about 50 airplanes.

Jetstar (IMU)/(PAH) and Tigerair (TGR) previously were angling to develop large groups in the Southeast Asian market, but have essentially given up that fight. By closing down its (MND) Indonesian affiliate and selling its Philippine affiliate to Cebu Pacific (CEB), (TGR) now only has one base in Southeast Asia, Singapore, where it is significantly slowing down expansion in response to overcapacity. ((TGR) still has an affiliate in Australia (TAU) and is planning to launch an affiliate in Taiwan in (2H) 2014.)

Jetstar (IMU)/(PAH) also has halted expansion in Singapore and is very small with tepid expansion in Vietnam, where VietJet (VJE) has emerged as the largest (LCC). (IMU)/(PAH) is now focusing more on North Asia; it has a fast expanding and successful affiliate in Japan and a planned affiliate for Hong Kong. Reports even suggest that Jetstar (IMU) has been approached by Lion (MLI) to sell its stake in Singapore-based Jetstar Asia (JSA), an unlikely move, as Singapore is central to Jetstar (IMU)'s Asian strategy. Nonetheless, the prospect of a closer relationship between Lion (MLI) and Jetstar (IMU) is intriguing and would potentially swing the balance of power in the Southeast Asian (LCC) sector.

Tigerair (TGR) will for now remain the largest (LCC) in Singapore, Cebu Pacific (CEB) in the Philippines, and VietJet (VJE) the market leader in Vietnam. (VJE) also still has ambitions to build a group in Southeast Asia, starting with Thailand. But VietJet (VJE) and any other group looking to take on AirAsia (ASW) and Lion (MLI) will need deep pockets (and probably some good friends in the business).

The 1st chapter in the battle for SE Asia short-haul (LCC) sector has already been written, with (ASW) and (MLI) the main victors. As Lion (MLI) puts the foot on the accelerator despite indications of overcapacity, everyone could be in for a bumpy ride. One thing is clear: the Southeast Asian (LCC) book will have many more chapters and more twists than a bag of pretzels.

737-8GP (39820, N748DB), leased to 9Air.com, via Transportation Partners.

September 2014: A report on the Lion Air (MLI) 737 crash has just been released. It has been added above immediately after the April 2013 report.

November 2014: News Item A-1: (L-3) Aviation has received an order from Indonesia’s Lion Air (MLI) for its (FA2100) cockpit voice recorder (CVR) and the (T3CAS) Integrated Surveillance System for 234 Airbus A320s. Delivery of (L-3) equipment for new Lion Air (MLI) A320s is expected to begin in March 2015.

News Item A-2: Indonesia’s Lion (MLI) Group has taken delivery of its 1st 3 Airbus airplanes from a March 2013 order for 234 A320 family airplanes, comprising 109 A320neos, 65 A321neos and 60 A320ceos.

The initial batch of A320s are set to join the fleet of the Group’s full service subsidiary, Batik Air (BTK), flying on domestic and regional services. The (BTK) airplanes are powered by (CFM56) engines and feature a premium two-class layout seating 156 passengers.

December 2014: Indonesia's Lion Group signed a purchase agreement for +40 additional ATR 72-600 turboprops in a deal worth $1 billion at list prices. The agreement was signed in Rome and brings the Lion Group’s total order book for ATR 72-600s to 100, making it the largest customer for the type.

The Lion Group already has three of its subsidiary airlines operating ATRs: Wings Air (WON) with a fleet of 32 ATRs in Indonesia; Malindo Air (MXD) with 10 ATRs in Malaysia; and Thai Lion Air (TLM), with one airplane in Thailand.

The additional 40 ATR 72-600s will be used to meet the growing demand forecast over the next five years both within the Group's existing operators' networks and to develop other opportunities for ATR operations throughout Asia and developing markets worldwide. Deliveries of this set of airplanes will start in 2017 and run into 2019.

The Pratt & Whitney (PRW)-powered ATR 72-600 seats between 68 and 74 passengers and has a maximum range of 900 nautical miles.

“The ATR 72-600 airplanes are very competitive, as they enable us to ensure a high frequency service. With these new generation airplanes in our fleet, the Lion Group will continue to contribute to the economic development in Indonesia, Malaysia and Asia, including remote regions as well as tourist driven markets such as Bali, Java, Kalimantan [Borneo] and Sumatra,” Lion Group Chairman, Rusdi Kirana said.

January 2015: Boeing (TBC) delivered new 2 737-800s and 1 737-900ER.

May 2015: News Item A-1: Indonesia's largest homegrown low-cost carrier (LCC), Lion Air (MLI), has said it will halt expansion plans due to significant reductions in passenger numbers.

(MLI), which was recently censured by the Indonesian Directorate General of Civil Aviation (DJPU) for contraventions over flight delays in February, says it has been hit by falling passenger numbers due to new rules from the Ministry of Transportation.

The new rules, introduced earlier this year, prohibit discount fares of <40% of the official price.

"The decline in the number of ticket sales is happening because of the permanent 40% lower limit on ticket tariffs," said Lion Air (MLI) Operations Director Ari Kuncoro Daniel Putu. "Since the policy was implemented, many passengers switched, because Lion Air (MLI) was not able to fix the flight tickets at low prices," he added.

Putu said that this had directly resulted in a drop in ticket sales, as (MLI)'s target market was "the kind of traveler who takes advantage of cheap fares."

The slumping sales come on the heels of the (DJPU)'s suspension of new Lion Air (MLI) route applications following the stranding of some 2,000 passengers over three days over Chinese New Year at Jakarta and other airports.

(MLI) has appealed against the suspension, which is currently being considered by Indonesian Transport Minister, Ignatius Jonan.

But even if the suspension for the application of new routes is lifted, Lion Air (MLI) has said it will not use the extra rights for its (MLI) (LCC) operations, but for its full-service Batik Air (BTK) operation instead.

"[Any] new routes will not be used by (MLI), but for the flag of Batik Air (BTK)," said Putu. "The plan is to open up routes to Sulawesi and Maluku, as well as Gorontalo, Palu and Ternate," he said, adding that any further Lion Group development would now focus on Batik Air (BTK), not Lion Air (MLI).

News Item A-2: The Indonesian government has committed to upgrade and expand the country’s airport capacity to cope with the latest generation of narrow body jet airplanes and also to extend Air Service Agreements (ASAs) with neighboring countries.

Indonesian Transport Minister, Ignatius Jonan said increasing the runway capacity in provincial and district capitals is “one of the priorities of the Ministry of Transportation.”

The Indonesian government says it will build 15 new airports in the more remote regions of the archipelago. This could include border areas, pioneer resource areas, or areas prone to disasters, Jonan said. “We are therefore delighted when there is enthusiasm of all stakeholders in building airports conducted by the government, state-owned Angkasa Pura, or by Local Government Units,” he said.

Jonan said that of the country’s 237 airports, 157 are managed by the Ministry of Transportation, with the remainder either operated by private operators such as Angkasa Pura (26), and the rest (42) managed by Provincial or District governments.

Jonan said that priority would be given to development and runway expansion at provincial level, to allow flights from Airbus A320 or Boeing 737 operators. “There are increasing numbers of [these airplanes) operated by many airlines in Indonesia today,” he said.

The government also committed to increase capacity at remote-destination sub-district level, Jonan said. “The government will also increase [spending] in order to facilitate runways at airports that can be landed by ATR 72 or C-130 Hercules class airplanes,” he said.

In a concurrent move, Indonesian President, Joko Widodo announced a new route between Jakarta and southern neighbor, Papua New Guinea. The new route will serve Port Moresby, and be operated by flag carriers Garuda Indonesia (GIA) and Air Niugini (NIU).

June 2015: News Item A-1: "Lion Air (MLI) to Operate Domestic Wide Body Services" by (ATW) Jeremy Torr, June 5th, 2015.

Lion Air (MLI) has said it will use its new twin-aisle Airbus A330-300s, due to be delivered later this year, for domestic schedules rather than long-haul. "We will use these wide body airplanes for our domestic flights, especially on busy flight routes like Jakarta - Medan, Jakarta - Surabaya, and Jakarta - Makassar," (MLI) Operations Director, Daniel Kuncoro Putu Adi said.

Adi said the use of the new wide bodies would enable (MLI) to reduce the flight frequency on the existing routes. For example the 22 existing flights from Medan would be cut significantly, he said.

The use of the 440-seat airplanes will also allow the use of some of its 100-plus Boeing 737 fleet to be used as backup at various airports to avoid problems with delays as experienced by the company over the last Chinese New Year festival, Adi said.

“We now operate 101 airplanes, but [once the A330s arrive] we will also put some planes on standby in Jakarta, Surabaya, Medan, and Makassar to ensure that we have the best backup in the event of a problem,” he said.

The A330-300s will also act as replacements for Lion Air (MLI)’s Jakarta - Jeddah religious flight schedules, currently served by Boeing 747-400 airplanes.

Using the high-density seating configuration, together with higher A330 fuel efficiency on domestic routes, could also bring some relief to Lion Air (MLI) in terms of yields. It recently announced a moratorium on expansion due to intense competition and fare cutting in its main markets.

The use of wide bodies for domestic (LCC) use has been a long mooted rumor amongst SE Asia’s (LCC) community, but in many cases has been held back by infrastructure constraints.

However, (MLI)'s proposal to use Batam's Hang Nadim Airport with its 13,000 ft runway as a 2nd principal hub could open the door to further wide body domestic links across the region.

News Item A-2: Lion Airlines (MLI) converted 9 A320ceo order to equivalent A320neo.

August 2015: News Item A-1: Avolon Leasing (AZV) delivered Lion Air (MLI)’s 7th leased Boeing 737-800.

November 2015: News Item A-1: "Indonesia’s Lion Air (MLI) Eyes China Routes" by (ATW) Jeremy Torr, November 6, 2015.

Lion Air (MLI) is looking to open new routes from its home base in Jakarta to destinations in China, including Shanghai and Guangzhou.

(MLI) General Affairs Director, Edward Sirait said (MLI) is currently engaged in negotiations for route permissions on these and other routes, to be opened in coming months.

The airline said it would likely use new Airbus A330-300 aircraft on the schedules, possibly using a single-class, 440-seat configuration. It has taken delivery of 1 Airbus A330-343 (1675, PK-LEF), ex-(F-WWTN) this year, and is due to take +2 more by year-end.

To date, (MLI) has concentrated on domestic services for the bulk of its network, offering more than 200 flights a day to 36 destinations across Indonesia. It currently offers service to Singapore, Malaysia, Vietnam, and Saudi Arabia on its international route map, although joint ventures (JV)s, Thai Lion Air (TLM) and Malindo (MXD) serve more international destinations.

Sirait said a potential tourist business from China to Indonesia could potentially “take >10 [of our] planes to serve the cities,” pending the granting of the required permits. It is not clear if the routes would be operated by (MLI) itself, or its full-service subsidiary Batik Air (BTK).

(MLI) runs a 100-plus fleet of single-aisle airplanes (predominantly Boeing 737-800s and 737-900s. It placed a 2011 order for 230 Boeing 737s and an Airbus order in 2013 for 234 A320s.

Its parent, the Lion Group, is planning a 30% initial public offering (IPO) in 2016 year to raise $800 million.

News Item A-2: Following a year-long consultation, the Indonesian Ministry of Transportation (MOT) has rejected the Lion Group's proposal to create a new four-runway airport at Lebak, Banten province near Jakarta.

(MOT) spokesperson, Novie Riyanto said the proposal was turned down on safety and financial grounds. "This decision [not to grant permission] is final," he said. "In principle, the proposal can’t be accepted.”

The airport project, which was planned to accommodate wide body jets and up to 100 million passengers a year along with a dedicated cargo facility, was being undertaken by the Lion Group together with developer PT Maja Raya Indah Semesta (MRIS).

However, the (MOT) said operations from the proposed 4,000 hectare site at Curugbitung would impinge on airspace at existing facilities and at a local flying school at Budiarto Airport. "So from a safety perspective, Lebak's plans to offer commercial services cannot be allowed to proceed," (MOT) Airports Director, Agus Santoso said.

Despite several updates to the original design that made changes to both runway facilities and terminal locations, Santoso said "the proposal still does not meet minimum safety requirements."

The transport authority added that broader airspace congestion, cited by air navigation operator Airnav Indonesia, was also a factor. This potentially included existing operations out of Jakarta airport facilities at Soekarno-Hatta International and low-cost hub Halim Airport, some 70 miles to the NE of the proposed site.

News Item A-3: Indonesia’s Minister of Transportation, Ignasius Jonan has committed to adding +15 new airports to the country’s capacity by 2018.

Addressing regional airline (CEO)s at the recent Association of Asia Pacific Airlines (AAPA), conference, Jonan said that as part of a $1 billion dollar allocation on safety and infrastructure, the Indonesian government would also upgrade facilities at existing airports across issues such as runway capability, resurfacing, new facilities and air traffic management (ATM).

“We have 237 airports in operation in Indonesia at the moment,” Jonan said. “The government plans to add +15 new airports up to 2018.”

He said the government would be looking at a variety of upgrades to existing airports’ quality, runway length and terminals, as well as offering safety boosts.

Jonan said the other key push for his ministry is to upgrade airport navigation systems to cope with what he said is a “tremendous growth and challenge” in passenger numbers, driven by a move from many smaller carriers to upgrade from turboprops to single-aisle jets.

“Out of 237 [airports], at least 100 should be able to serve Boeing 737, Airbus A320 or Sukhoi aircraft by 2018,” he said.

Jonan said the Transport Ministry is already working with UK (ATM) operator (NATS) to help modernize Indonesia’s air navigation systems, with the aim of offering instrument landing system (ILS) at 100 Indonesian airports by 2018.

News Item A-4: SR Technics (SWS) has signed a 6-year integrated component-services contract with Lion Air (MLI) to manage components on Airbus A330s. Services will be managed from Kuala Lumpur and Zurich.

Parent, the Lion Air (MLI) Group leases 737-8GP (39871, 9M-LNY), ex-(N6065Y), to Malindo Air (MXD).

2 A330-343Es (1675, PK-LEF; 1680, PK-LEG), Jackson Square Aviation leased.

See video: "Citilink vs Lion Air."

January 2016: "Indonesia Suspends Three Lion Air (MLI) Route Licenses" by (ATW) Jeremy Torr, January 8, 2016.

The Indonesian Transportation Ministry (ITM) has suspended three Lion Air (MLI) route licenses and has reprimanded the Indonesian low-cost carrier (LCC). The action came after both Lion Air (MLI) and Batik Air (BTK) had failed to operate flights on certain routes for 21 consecutive days.

The 3 routes, from Jakarta to Surabaya, Medan, and Pontianak, had been allocated to (MLI) and its subsidiary, (BTK).

The ministry’s air transportation directorate inspectors carried out investigations, which verified that both (MLI) and (BTK) had committed contraventions of permit conditions, (ITM) spokesperson, Muzaffar Ismail told news agency "Kompas."

Ismail said the carriers’ standard operating procedure for delay management and implementation is currently at 60% of the target level, which he described as “very low.” “We will revoke a flight route permit of an airline company, if it does not use the permit for 21 days at a stretch,” Ismail said. The Ministry, which has previously said it will apply regulations more stringently if domestic carriers do not fulfill license requirements, said it would consider further sanctions against the Lion Group if it did not improve management of all sanctioned routes.

The (ITM) said the carriers would be given 3 months to rectify the contraventions, but if they did not satisfy inspectors the issues had been addressed, the likelihood of withdrawing their business license was real.

“If after 3 months, the airline is still getting a score of <60%, we can freeze the route,” Ismail said.

February 2016: News Item A-1: "INCDT: Lionair (MLI) 737-900 at Surabaya on February 20, Runway Excursion on Landing" by Simon Hradecky, The Aviation Herald, February 20, 2016.

A Lionair (MLI) Boeing 737-900, registration (PK-LFG) performing flight JT-263 from Balikpapan to Surabaya (Indonesia) with 205 people on board, landed on Surabaya's runway 10 (length 3000 meters/9845 feet) in thunderstorms and heavy rain at about 11:08 am L (4:08 am Z). The 737-900 came to a stop about 80 meters past the runway end with the nose wheel on soft ground past the runway end safety area. There were no injuries, the airplane received minor if any damage.

The occurrence airplane was still on the ground about 18 hours after landing.

The airport reported the airport was briefly closed until the airplane was moved to the apron. There were no injuries, and the airplane received no damage.

News Item A-2: Transportation Partners, the leasing arm of the Lion Group, and (CFM) International announced an order for 348 (LEAP-1A) engines to power 174 firm Airbus A320neo aircraft. The aircraft order was announced in March 2013. The value of the installed and spare engines is $4.9 billion at list prices.

March 2016: Three of Indonesia’s largest carriers (Batik Air (BTK), Citilink (CNK) and Lion Air (MLI)) are seeking a reappraisal of the European Union’s (EU) carrier blacklist next month. Of the country’s major carriers, only national flag carrier, Garuda Indonesia (GIA) has been granted full (EU) access since it was unlisted in 2009.

“An (EU) team will review our Directorate General of Civil Aviation (DGCA) oversight of the airlines, both in terms of organization and regulation,” Indonesian Director of Airworthiness and Aircraft Operations, Muhammad Alwi said.

He said the airlines would be subject to a safety and operations audit by a team of seven (EU) inspectors that were scheduled to arrive in Indonesia in the last two weeks of April.

Alwi said the three carriers would be subject to ongoing checks via the (DGCA) for a period of at least 10 days, and the key issue would be the meeting of specific (EU)-specified standards to see a potential removal from the (EU) blacklist. “Our job is to meet all the targets, including the lifting of the flight ban for the airlines,” he said.

As of the end of December 2015, Indonesia has 57 airlines banned on the (EU) list.

The country has come under sustained criticism for the application of its safety standards over recent years, as both Transport Minister, Ignatius Jonan and airline body spokesperson, Andrew Herdman warned of a need to increase operational standards.

If the review is successful and the three carriers are removed from the blacklist, Alwi said the (DGCA) would put forward a further list of airlines for audit. “Going forward, we will propose four other operators including air charter carriers,” he said.

June 2016: Garuda Indonesia (GIA) is slowing its domestic expansion at its main full service brand, while accelerating domestic expansion at its low cost carrier (LCC) subsidiary – Citilink (CNK). (GIA) is considering the transfer of secondary leisure-focused domestic routes to (CNK) and for the first time, may start code sharing with its sister airline, which until now has focused on operating alongside (GIA) on trunk routes.

The Garuda group has tweaked its domestic strategy in response to both intensifying competition from the Lion (MLI) Group subsidiary, Batik Air (BTK), and an overall slowdown in domestic growth. (BTK) is a full service airline but has impacted Citilink (CNK) as its fares are generally priced only slightly above (CNK)'s fares, and significantly below those of Garuda (GIA). (CNK) slipped back into the red in 1Q 2016 after six consecutive profitable quarters.

Citilink (CNK) is essentially now sandwiched between Lion (MLI), which generally has the lowest fares in Indonesia, and Batik (BTK). (GIA) believes that it needs to respond by expanding Citilink (CNK) rapidly, resulting in market share gains and lower unit costs, as it starts to achieve better economies of scale.

July 2016: Aergo Capital has purchased two Boeing 737-900ERs from PT Lion Mentari, operating as Lion Air (MLI). The acquisition was facilitated by Transportation Partners. The airplanes will continue to be operated by (MLI) on domestic and international commercial routes. This acquisition brings Aergo’s fleet to 26 airplanes (including owned airplanes and airplanes under management).

February 2017: News Item A-1: Indonesia’s Lion Air (MLI) Group will implement an electronic flight bag (EFB) strategy on its incoming fleet of Boeing 737 MAX 8s, which will be used for its subsidiary Batik Air (BTK) Malaysia.

The Lion Air Group will receive the 1st of its order of 201 737 MAX 8s later this year. The new aircraft will utilize digital technology provided by flight operations and air traffic management services company NAVBLUE.

May 2017: Lion Airlines (MLI) subsdidiary Malaysia’s Malindo Air (MXD) has operated the 1st revenue flights with a re-engined Boeing 737 MAX 8 airplane in (MXD)'s subsidiary Batik Air (BTK) livery.

(BTK), which took delivery of the 1st (CFM) International (LEAP-1B)-powered 737 MAX 8 last week, on May 22 operated the airplane on a revenue flight from Kuala Lumpur to Singapore and then on a return flight from Singapore to Kuala Lumpur.

The flights operated as Malindo (MXD) flight 803 and flight 804, respectively. The Kuala Lumpur - Singapore flight took 47 minutes while the return flight took 43 minutes.

Norwegian (NWG) is expected to be the next airline to put the 737 MAX 8 into service. Southwest Airlines (SWA), which placed the launch order for the 737 MAX, is expected to receive its 1st 737 MAX 8 on July 1 and place it into service on October 1.

June 2017: Lion Air (MLI) signed a Memo of Understanding (MOU) for 50 Boeing MAX 10 single-aisle airplanes at the Paris Air Show. The (MLI) group already operates 737 MAX 8 and 737 MAX 9s.

September 2017: The Lion Air Group’s maintenance, repair and overhaul (MRO) subsidiary plans to expand its base on the Indonesian island of Batam, to handle the group’s expected fleet growth and also to service more 3rd-party customers. The subsidiary, known as Batam Aero Technic (BAT), constructed its 1st facilities on the island in 2013. (BAT) now has 2 hangars capable of accommodating 12 narrow body or 4 wide body airplanes. A 3rd hangar is being built that will handle 6 narrow body
airplanes.


Note: LION MENTARI AIRLINES (MLI) is listed on the latest (EU) blacklist released 03.04.2012 of airlines whose operations are subject to a ban within the (EU)*. *Airlines listed in Annex A could be permitted to exercise traffic rights by using wet-leased airplanes of an air carrier which is not subject to an operating ban, provided that the relevant safety standards are complied with.

Fleet:
(definitions)

Click below for photos:
MLI-737 MAX - 2011-11
MLI-737 MAX 9 - 2012-02
MLI-737-2P5
MLI-737-2P5-A
MLI-737-800 with sharklets-2017-09.jpg
MLI-737-900
MLI-737-900 - 100TH NG
MLI-737-900-2014-05
MLI-737-9GP-JUN07
MLI-747-412-AUG09
MLI-A310-300
MLI-A310-322
MLI-A321neo - 2013-03
MLI-A330-300 - 1st 2015-11.jpg
MLI-A330-300 - 2015-06.jpg
MLI-MD-82 F
MLI-MD-82-E
MLI-MD-82-H
MLI-MD-82-J
MLI-MD-82-MI
MLI-MD-82-MO
MLI-YAK-42D-3
MLI-YAK-42D-8

September 2017:

0 737-2P5 (J78D-15) (502-21440, /77, PK-LIA), EX-(TII), (NTV) 3 YR LSD 2000-06. RTND 2003-04. 105Y.

0 737-266 (JT8D) (466-21227, /76 N132SW), EX-(EGP), (NTV) LSD 2001-08. RTND.

0 737-291 (JT8D) (218-20363, /69 PK-LID W/O 2002-01 ACCDT), (NTV) LSD 2001-05.

2 737-3G7 (CFM56-3B-2) (1076-23218, /84 PK-LIU, 2006-03; 1090-23219, /85 PK-LIV 2006-04), EX-(PIE), LEHMAN BROTHERS LSD. 149Y.

0 737-46B (CFM56-3) (24123, PK-LII), 2005-06.

2 737-4YO (CFM56-3C1) (1733-24467, /89 PK-LIF; 1779-24513, /89 PK-LIG), EX-(PNM), (GEF) LSD 2004-08. (1824-24682) NTU. 8C, 150Y.

0 737-4YO (CFM56-3C1) (24520), EX-(AAR), (GEF) LSD 2005-02. RTND. 8C, 150Y.

4 737-4YO (CFM56-3C1) (1777-24512, /89 PK-LIT; 1841-24684, /90 PK-LIW), LSD 2006-04. 8C, 150Y.

2 737-4YO (CFM56-3C1) (1963-24692, /90 PK-LIR; 1971-24693, /90 PK-LIS), LSD 2005-12. 8C, 150Y.

1 737-4YO (CFM56-3B2) (2033-24911, /91 PK-LIQ - - SEE INCDT - - NOVEMBER 2010), (GEF) LSD 2005-07. 8C, 150Y.

4 ORDERS (2014-09) 737-800 (CFM56-7B), (BOC) AVIATION (SIL) LSD:

7 737-800NG (CFM56-7B), AVOLON (AZV) LSD 2014-04 & 2015-08.

26 737-8GP (CFM56-7B-26E) (37292, /12 PK-LJR; 37293, /12 PK-LJS; 37294, /12 PK-LJU; 37295, /07 PK-LJW; 37297, /09 PK-LKH; 38317, /12 PK-LJQ; 38681, /09 PK-LKH; 38621, /13 PK-LKJ; 38721, /12 PK-LJV; 38722, PK-LJY, 2012-07; 38724, /13 PK-LKI; 38728, PK-LKS, 2013-02 - - WRITTEN OFF AFTER ACCDT - - SEE 2013-04; 38691, PK-LKU, 2013-06; 38733, PK-LKT, 2013-07; 38744, PK-LOH; 2014-02; 38746, PK-LOI, 2014-02; 38747, PK-LOJ, 2014-02; 39815, PK-LOP, 2014-05; 39816, PK-LOQ, 2014-05; 39820, N748DB; 39871, 9M-LNY)), 39820 LST 9AIR.COM 2014-08. 39871, 9M-LNY LST MALINDO AIR (MXD 2015-11. 189Y.

201/150 ORDERS 737 MAX 8, MAX 9, MAX 10 (LEAP-1):

29 ORDERS 737-900ER NEXTGEN (CFM56-7B26):

1 ORDER (2014-09) 737-900ER (CFM56-7B26) NEXTGEN, (BOC) AVIATION (SIL) LSD:

67 +111/50 ORDERS 737-9GPER (CFM56-7B26/3) (1981-35680, /06 PK-LFG; 2093-35679, /06 PK-LFF; 2285-35710, /07 PK-LFH; 2319-35711, /07 PK-LFI; 2349-35712, /07 PK-LFJ; 2437-35713, /07 PK-LFK; 2461-35714, /07 PK-LFL; 2485-35715, /07 PK-LFM; 2504-35716, /08 PL-LFO; 2455-35717, /07 PK-LFP; 2694-35719, /08 PK-LFR; 2756-35720, /08 PK-LFS; 2793-35721, /09 PK-LFT; 2836-35722, /09 PK-LFU; 2848-35723, /09 PK-LFV; 2879-35724, /09 PK-LFW; 2897-35725, /09 PK-LFY; 2904-35726, /09 PK-LFZ; 2934-35727, /09 PK-LGJ; 2984-35728, /09 PK-LGK; 3008-35729, /09 PK-LGL; 3075-35730, /09 PK-LGM; 3093-35731, /09 PK-LGO; 3111-35732, /09 PK-LGP; 3136-35733, /09 PK-LGQ; 3153-35734, /09 PK-LGR, 2010-01; 3183-35735, /10 PK-LGS; 3207-35736, /10 PK-LGT; 3225-35737, /10 PK-LGU; 3297-37268, /10 PK-LGV; 3321-37269, /10 PK-LGW; 3333-37270, /10 PK-LGY; 3345-37271, /10 PK-LGZ; 3375-37275, /10 PK-LHH; 3381-37276, /10 PK-LHI; 3411-37272, /10 PK-LHJ; 3423-37273, /10 PK-LHK; 3441-37274, /10 PK-LHL; 3513-37277, /11 PK-LHM, 2010-12; 3537-37280, /11 PK-LHQ; 3555-37278, /11 PK-LHO; 3573-37279, /11 PK-LHQ; PK-LHR; PK-LHS; 37283, PK-LHT; 38300, PK-LHU; 37284, PK-LHV; 38302, /09 PK-LHW; PK-LHX; 37285, PK-LHY; 37286, /11 PK-LJF; PK-LJG; PK-LJH; 37289, /11 PK-LJJ; 38305, /11 PK-LHZ; 38311, /11 PK-LJK; 37290, /12 PK-LJL; 38313, /12 PK-LJM), (GEF) LSD), WITH WINGLETS. 213Y.

4 737-96NER (CFMK56-7B27/3) (2559-35223, /08 PK-LGF; 2590-35225 /08 PK-LGG; 2596-36539, /08 PK-LGI; 2621-35227, /08 PK-LGH), (GEF) LSD 2008-12, WITH WINGLETS. 213Y.

2 747-412 (PW4056) (736-24063, /89 PK-LHF 2006-07; 761-24065, /89 PK-LHG - - SEE PHOTO - - "MLI-747-412-2009-08"), EX-(OHK)/(SIA). 14F,
73C, 236Y.

5 ORDERS 787-8, FOR SUBSIDIARY PREMIUM CARRIER, BATIK AIR (BTK), MAY BE CANCELLED (2014-02):

0 MD-82 (JT8D-217A) (1278-49417, /86 PK-LMG; 1403-49419, /87 PK-LMH), EX-(KAL), CASTLE HARBOUR LSD 2002-06. 49417; LST (WON) 2005-07. RTND. 165Y.

0 MD-82 (JT8D-217A) (1076-49102, /82 PK-LMP; 1063-49117, /82 PK-LMQ), CASTLE HARBOR LSD 2003-05. 49102; LST (WON) 2005-02. ALL RTND. 165Y.

0 MD-82 (JT8D-217A) (1043-48083, /81 PK-LML, (TCI) LSD 2002-10; 1159-49262, /84 PK-LMJ; 1163-49263, /84 PK-LMI), (RAE) LSD 2002-10. ALL RTND. 165Y.

0 MD-82 (JT8D-219) (1032-48069, /81 PK-LMM), (TCI) LSD 2002-10. RTND. 165Y.

0 MD-82 (JT8D-217C) (1173-49189, /84 PK-LMN), (GEF) LSD 2002-10. CRASHED 2004-12. W/O. 165Y.

0 MD-82 (JT8D-217) (1061-49116, /82 PK-LMR), WET-LST (BRM) 2004-05. RF (BRM) 2004-06. RTND, LST (WON) 2005-01.

0 MD-82 (JT8D-217) (1066-49114, /82 PK-LMS; 1065-49118, /84 PK-LMK), (GEF) LSD 2003-07. 49114; LST (WON) 2005-07. RTND. 165Y.

0 MD-82 (JT8D-217) (1079-48022, /82 PK-LMV), (GEF) LSD 2003-12. RTND. 165Y.

0 MD-82 (JT8D-217A) (1171-49264, /84 PK-LMT), (GRB) LSD 2003-12. RTND. 165Y.

1 MD-82 (JT8D-217) (1186-49250, /85 PK-LMY), KUTA-TWO ACFT LSD 2004-04, WET-LST (BRM) 2004-05. 8C, 144Y.

0 MD-82 (JT8D-217A) (1201-49373, /85 PK-LMO), (GEF) LSD 2002-11. RTND. 165Y.

0 MD-82 (JT8D-217) (1242-49429, /86 PK-LMU), HELLER LSD 2004-02. LST (WON) 2005-07. RTND. 165Y.

1 MD-82 (JT8D-217) (1291-49443, /86 PK-LMW, INCDT ON 2006-03), HELLER LSD 2003-10. 165Y.

0 MD-82 (JT8D-217) (1351-49489, PK-), 2005-06. RTND. 165Y.

0 MD-82 (JT8D-217) (49582, PK-WIH), WET-LST (WON). RTND. 165Y.

0 MD-82 (JT8D-217C) (2069-53147, /93 PK-LMF), (GEF) LSD. RTND, LST (GMG) 2006-10. 165Y.

0 MD-82 (JT8D-217A) (2145-53481, PK-LME), RTND LESSOR 2003-05. 165Y.

0 MD-83 (JT8D-217) (1637-49788, PK-LMK), (GAX) LSD 2004-04. RTND.

4 MD-90-30 (V2528-D5) (2129-53489, PK-LIM, 2005-05; 2133-53490, PK-LIO, 2005-06; 2144-52551, PK-LIL, 2005-06; 53551, PK-LIP; 2181-53570, 2005-03; 2182-53573, PK-LIK, 2005-04), 53489; & 53573; RTND. EX-(AAL), (TBC) LSD. 8C, 153Y.

1 A310-322 (JT9D-XXX) (410), (RAE) LSD 2001-08.

0 A310-322 (437, PK-LEP), RTT (AWW) 2002-08, LST (AMF).

0 A310-324 (409, PK-LEO), (RAE) LSD 2001-06, RTND 2002-06.

3 +57 ORDERS A320ceo (CFM56-5B), 1ST 3 FOR BATIK AIR (BTK) OPS.

109 ORDERS A320neo:

65 ORDERS A321neo:

1 A330-343 (1675, /15 PK-LEF), EX-(F-WWTN).

2 A330-343E (1675, PK-LEF; 1680, PK-LEG), EX-(F-WWTS), JACKSON SQUARE AVIATION LSD 2015-11.

10/10 ORDERS (2009-02) ATR 72-500, FOR (WON) OPS. 72Y:

3 +19 ORDERS YAK 42D (4520424308016, RA-42430; 4520423219073, RA-42414), EX-(SMR) & (CHE) LSD (4520422219055, RA-42412, (CSK) LSD 2001-03) (RA-42413 "TOBA LAKE"). 3 RTND (CSK) 2002-07.

2 HAWKER 900XP (TFE31-50R), EXEC.

50/50 ORDERS (IPTN) N250 (PT6A-42), 19Y:

Management:
(definitions)

Click below for photos:
MLI-1-RUSDI KIRANA-2006-10-A
MLI-1-RUSDI KIRANA-2014-05
MLI-1-RUSDI KIRANA-A
MLI-2-2006-09
MLI-2-2006-10-B
MLI-2-2006-10-C
MLI-2-2006-10-D
MLI-2-2006-10-E

PAK RUSDI KIRANA, FOUNDER & CHIEF EXECUTIVE OFFICER (CEO) OF (MLI) GROUP & CHAIRMAN WINGS AIR (WON).
2014-05: "AIRLINE BUSINESS" Interview:
Rusdi has relentlessly defied his critics to build Lion Air (MLI) into the largest operator in Indonesia, and is showing no sign of slowing, as he contemplates an initial public offering (IPO) for the group and a rising political career

His boyish smile and signature moustache may have stayed the same, but much has changed in Rusdi’s life over the past 15 years.

Despite starting out as a virtual nobody in the aviation world (unable even to convince lessors to lease him his first airplane) Rusdi has forged Lion Air (MLI) into Indonesia’s dominant airline. It took time, but before long the aviation world was beating a path to his door.

In 2011, he signed an order for up to 380 Boeing 737s in the presence of USA President, Barack Obama. He followed this in 2013 with an order for 234 Airbus jets, inked in the presence of French President, François Hollande at the Elysee Palace in Paris.

These days, the 50-year-old is hounded by airplane salesmen and journalists alike, eager for an insight into his plans for the Lion Group.

A true businessman, Rusdi believes in keeping busy and moving quickly. Last year alone, he added three new airlines to the Lion Group’s portfolio. Batik Air (BTK)’s mission is to break flag carrier Garuda Indonesia (GIA)’s grip on the full-service market in Indonesia. In ­Malaysia, he launched Malindo Air (MXD), and in Thailand he established Thai Lion Air (TLM).

His pace of life picked up a notch earlier this year, when he stepped into the world of politics. In a surprising move, Rusdi, a ­Christian, was appointed the Deputy Chairman of the National Awakening Party – a moderate Islamic party in Indonesia.

The party is running in the legislative ­elections in April, and Rusdi’s ambition is to secure a seat in parliament and eventually become the country’s Agriculture Minister. If all goes according to plan, the founder of Lion Air (MLI) (the largest low-cost carrier (LCC) in ­Indonesia) says he is ready to step down as chief of Lion Group to focus on his political career.

There have been signs that the man once known as a “key-man risk” (a leader so hands-on there are concerns about the business impact should he leave) has started loosening his grip on his airline business. In March, Rusdi appointed his General Manager Sales & Marketing, Rudy Lumingkewas, who has been with (MLI) for the last 12 years, to be his successor as (CEO) of Lion Air (MLI). Rusdi moved on to the position of group chief, to take a “strategic role” in bringing the group forward in its next phase of growth.

POLITICAL MOVES

“Fifteen years ago, I said I don’t want to be involved in politics. I kept outside the system and just did my business. But after being more involved in my business, I realized I cannot be outside the system. I have to be in the system in order to fix, suggest or influence, to make sure the regulations are pro the country and pro the businessmen,” Rusdi told "Airline Business" in Jakarta. “From my business dealings, I can see the flaws in the system.”

He wants to focus on agriculture because he “finds it strange” that a country of 240 ­million is not self-sufficient, instead relying heavily on food imports.

With Singapore’s founding father, Lee Kuan Yew, as his role model, Rusdi (who spends a few days a week in the city-state) believes that “leaving a legacy” is more important than merely having power or money. With politics on his mind, the usually low-key and media-shy businessman now goes on live telecast debates to speak on national issues, and is even considering buying his own helicopter so he can reach isolated farms across Indonesia.

The Chinese Indonesian says the foundation of his airline business, which he took pains to build for over a decade, is strong enough to let him take a back seat should he need to be fully involved in politics. “The business has been running [well] the last three to four years. Strategy-wise, I’ve ordered the airplanes. My staff in financing, operations, engineering [and] commercial are running the business. This is because the system is there, and it took me 14 years to build the system,” he said.

FLEET FINANCING

To stress his point, Rusdi said he did not have to meet with a single banker to secure financing for the group’s incoming 36 jets and 14 turboprops in 2014, because it was all taken care of by his finance team. He intends to spend the next few years training Lumingkewas (and also his 22-year-old nephew, who will be graduating from university this year) to eventually take over as (CEO) of Lion Air (MLI).

(MLI)’s order backlog comprises 528 airplanes, all of which are Airbus A320 and Boeing 737-family jets, with deliveries scheduled out to 2026. Rusdi is unconcerned by critics, who believe he has bitten off more than he can chew and are betting that, like his biggest low-cost carrier (LCC) competitor, AirAsia (ASW), he will have to defer deliveries at some point.

He responds that his current order book is “not enough”, and that he is in negotiations for more airplanes (including wide bodies) with a formal order coming this year.

The only wide bodies the group has on order are five Boeing 787s, which Rusdi says he will likely convert to the smaller 737s because Lion (MLI) “is not ready” to operate the high-tech airplane. He also needs to replace (MLI)’s two aging 747s, which are used for pilgrimage flights.

He wants a flexible large airplane for international and high-density domestic routes.

The group will also take delivery of the first of its 234 A320s this year. Rusdi said he went to Airbus (EDS) last year because Boeing (TBC) could not keep up with the group’s ambitious growth plans. He was also determined to show (TBC) he is not under their control. In addition, he is eyeing the Bombardier (BMB) CSeries for its potential to serve long thin routes within Indonesia, and is aware that “when you deal with somebody who needs you, you can get a good price.”

He denies that his massive orders are for grabbing headlines. Instead, they are because he sees a genuine need for more jets when the (ASEAN) "open skies" comes into play in 2015, allowing carriers to fly with fewer restrictions within the region. Besides, the airplanes on order are not exclusively for domestic operations with Lion (MLI), Batik (BTK) and Wings Air (WON), but also for the group’s various overseas ventures.

With fifth-freedom rights, Rusdi believes utilization of his airplanes will increase. They will be able to fly from Lion (MLI)’s base in Jakarta to Manila, for example, and on to a third city such as Hong Kong, before returning to Jakarta.

Some of the new airplanes will also be used for fleet replacement. In 10 - 12 years, (MLI) would also have the option to sell some of the airplanes it has completely paid off.

The group also has leasing firm, Transportation Partners as a “back-up plan.”

“They were built first to finance our deliveries. Secondly, if we have more airplanes (whether these are used ones that have been paid off or if the economy collapses), Transportation Partners can look to lease out the new airplanes,” he said. “I know it’s quite difficult for people to understand [our need for so many airplanes]. It’s not easy to explain. When we first ordered the airplanes, people said ‘Rusdi just wants to be a leasing company,’ but look, today we already have 110 airplanes delivered.”

Rusdi, who turned Lion (MLI) into the largest operator in Indonesia, with a 45% market share, wants more. While the shrewd businessman closely protects his operational figures, he shares that (MLI) and Wings together carried 38 million passengers last year, with an average load factor of about 90% LF.

“Today, we have the network and the ­frequency. We fly to some cities 15 or 20 times daily. We now fly every hour (we want to make it every half hour). With the frequency and network, you can still manage exchange rate losses, high fuel prices and a poor ­economy, because you’ve become the ­preferred carrier,” he said, adding that his full-service arm Batik (BTK), which was launched last May, has already turned a profit in its first year of operations.

His peers at home are not doing so well, however. Some struggle to obtain favorable slots and have insufficient fleet size to enjoy economies of scale. However, Rusdi is “not interested” in buying out smaller carriers, preferring to focus on Lion’s organic growth.

LOW COST PER (ASK)

Rusdi disclosed that his Indonesian ­operation’s cost per available seat-km is around four cents (much lower than the nine cents legacy carriers typically operate at). It is able to achieve this impressive figure, because it does not engage third parties, but does almost everything in-house. The group is building its own maintenance facility on a 25 ha/61 acre plot of land at Batam airport, and also buys its own spare parts, engines and simulators.

“I do everything on my own. When you keep buying, in the first and second years it’s tough, but in the end it will be economically cheaper,” he said.

Pressed to give an idea of (MLI)’s financials, which he has never disclosed, Rusdi laughs and rapidly declined without thinking twice. His only hint, and a rather telling one, is that (MLI) is solidly profitable: “I’m making 10, 20 times more than Garuda (GIA), much more than that.”

He is all too familiar with speculation that secret financial backers support Lion (MLI). He maintains, however, that the group is 100% owned by just him and his older brother ­Kusnan, and that they have funded (MLI)’s growth entirely from cash flows.

“The good thing about being a private ­company is people cannot see who you are. But I can see AirAsia (ASW), I can see Garuda (GIA) (it’s almost like a weapon, a strategy)” he said.

(MLI), however, does intend to eventually make its books public, as it has plans for an initial public (IPO) offering on the Indonesia Stock Exchange. This will only happen when the airline gains a 65% domestic market share (a figure Rusdi is confident of achieving).

“I know some people say it won’t happen, because other airlines are also going to grow. But the thing is, has Tigerair (TGR) grown? Has AirAsia (ASW) grown? Citilink (CNK), Sriwijaya (SJA)? No. But we’re going to grow to a 60 - 65% market share, and once we get there, we will go for an (IPO),” he said. “If you make money when everyone is making money, it’s not something great. But if you make money when the people around lose money, that’s another thing. I will make sure when people buy a stake in my airline, they don’t have to worry.”

This "can-do" attitude is precisely why he plans to start a new domestic carrier in ­Australia, where both Virgin Australia (VOZ) and Qantas (QAN) are deep in the red.

Rusdi adds that Lion (MLI)’s relatively relaxed approach to a listing reflects its financial health. “We have our own money,” he adds.

A clue to his personal wealth can also be seen from Forbes’ 2013 listing, where the Kirana brothers were ranked 29th of ­Indonesia’s 50 richest people, with an estimated net worth of $1 billion.

Lion (MLI)’s flightpath, however, has not been without turbulence. Just last April, one of its new Boeing 737-800s broke in two, when it landed short of the runway on approach to Bali. Amazingly, there was not a single fatality, although pictures of the airplane’s broken fuselage bearing Lion (MLI)’s red and white livery made it on to the front pages of major news publications worldwide.

Rusdi recalls how it “felt like a nightmare” when he received a text message about the crash from his team. “The airplane was new, had a pilot (FC) with 15,000 hours of experience, but it had a junior co-pilot (FC) who was flying with an instructor. Our manual says clearly that when you see that the visibility is unstable, you should go around, but still this happened.”

Lion (MLI) has since fired the two pilots (FC) involved in the crash, and also a third who had a rough landing in a separate incident, when he failed to make a necessary go-around. This harsh approach is to make clear to the pilots (FC) that “even if you land safely, but did not abide by the manual, we will fire you”.

(MLI) has since made changes internally, stepping up on the training of pilots (FC) and also subscribing to Airbus’ standards to check on Operations and Maintenance. Airplane data is downloaded and analyzed daily to make sure pilots (FC) are flying the jets safely. (MLI) has also signed a training services agreement with Airbus (EDS) to develop training ­programs for carriers under their brand. The aim is for its training school, Angkasa Aviation Academy, to achieve (EASA) certification.

Rusdi said he is aware that “people aren’t so positive” about Lion Air (MLI) when it comes to the airline’s safety record, and this is precisely why he is working hard to get the European Union (EU) ban on the carrier lifted, and also to achieve (EASA) certification for both its training school and the Maintenance Repair & Overhaul (MRO) facility in Batam.

“If you ask me what is the toughest part about the airline business, it is safety. I don’t worry about competition or politics, but safety, yes,” he said.

LIVING IN LION CITY

Lion Air (MLI) is among one of the few airlines in the world to have built a township for its employees. Dubbed "Lion City," the 32 ha/80 acre plot of land houses more than >1,400 apartments and dormitories for cabin crew (CA), pilots (FC), airline employees and their families. Employees are shuttled to work by free buses daily.

Located on the outskirts of Jakarta, Lion City has schools, medical clinics and supermarkets for its residents.

Rusdi said he built housing for his employees to help them cope with the rising cost of living, and to save them money on their children’s education and on transportation.

Lion City’s location near the Soekarno-Hatta International Airport also means employees do not have to battle Jakarta’s traffic jams to get to work. This translates into fewer delays and higher productivity for the airline.

A NEW GENERATION

Rusdi started his career working in a bakery, making Black Forest cakes and croissants, before moving on to sell American “Brother” typewriters.

Together with his eldest brother Kusnan, he then started a travel agency in Indonesia. This venture spurred the duo to set up their own airline, when they lost patience with the frequent delays and flight cancellations.

Today, Kusnan runs the mid-size travel agency, while Rusdi focuses his time on the group’s airline operations in Indonesia, Malaysia and Thailand. The brothers inherited their entrepreneurial blood from their father, who used to own a small garment factory.

Rusdi now spends a few days a week in Singapore, where his wife and youngest son live. Their older children (a 19-year-old daughter and 17-year-old son) are both studying in Seattle.

Rusdi’s wish is for the younger generation to eventually take over the family business. He believes his youngest will be well suited to looking after Lion (MLI)’s (MRO) operations in Batam, while his daughter will be a good fit for Lion’s leasing arm, Transportation Partners. He is also training his 22-year-old nephew to eventually take over as (CEO) of Lion Air (MLI).

His busy schedule leaves him with no time for hobbies. The businessman spends his days in Jakarta going from meeting to meeting and returns home to his beloved bulldog, Solo, at night. These days, he takes a Lion (MLI) flight from Jakarta to Batam to oversee the group’s (MRO) development, before making his way to Singapore, using his newly-acquired yacht, to spend time with his wife.

RUDY LUMINGEWAS, CHIEF EXECUTIVE OFFICER (CEO) (2014-03).

CAPTAIN ERTATA LANANGGALIH, MANAGING DIRECTOR.

CAPTAIN ROY DAVID LUMBUUN, DIRECTOR FLIGHT OPERATIONS (lionair@cbn.net.id).

DANIEL KUNCORO ADI PUTU, OPERATIONS DIRECTOR.

RAI PERING, MAINTENANCE & ENGINEERING DIRECTOR.
Rai Pering joined the Lion Air (MLI) Group in 2008 after serving as General Manager Engineering & Fleet Management at Merpati Nusantara Airlines (State Owned Company of the Indonesia Government).

Since joining the Lion Air Group, Rai Pering had responsibilities as an Engineering Specialist, Technical Service Manager, Wings Air Technical Director and Lion Maintenance & Engineering Director. He has overseen and contributed to Maintenance & Engineering, Aircraft purchase, lease and maintenance agreements plus Business Development.

Rai Pering has 23 years experience in airlines business, is an Aircraft Maintenance Licensed Engineer, Quality Assurance, Maintenance Planning, Material Planning, Engineering, Fleet Planning, Corporate budgeting and business planner.

Rai Pering holds an Aircraft Engineer Professional Diploma from the Civil Aviation Academy of Indonesia, and holds a Master’s degree in Industrial Engineering from the Institute of Technology Surabaya.

MR ROMDANI, DIRECTOR TECHNICAL (2000-08) (technical.department@lionairlines.com).

MR YUNITA, DIRECTOR FINANCE.

MR YOEN K, DIRECTOR MARKETING.

EDWARD SIRAIT, GENERAL AFFAIRS DIRECTOR.

FILEMON HADIKUNCORO, FLIGHT SAFETY MANAGER.

CAPTAIN ADE HAUMAU, FLIGHT OPERATIONS MANAGER.

IMAM FAJRI, QUALITY ASSURANCE (QA) MANAGER (2002-01).

GANJAR RAHAJU, PRODUCTION & PLANNING MANAGER (ganjar@lionairlines.com).

ESSAU BASARTHUS PURBA, ENGINEERING MANAGER, (technical.department@lionairlines.com).

WITJAKSONO ADIPRASTOWO, MAINTENANCE MANAGER.

 
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