jetjockey696
7th Dec 2009, 16:02
The JakartaGlobe 7/12/2009
PT Lion Air, Indonesia’s biggest domestic airline in terms of passenger volume, revealed on Monday that it is planning to expand its international routes next year.
Lion Air is considering flights to China, South Korea and Japan by mid-2010.
Analysts said the move would challenge main rival PT Garuda Indonesia’s dominance in the lucrative East Asia market.
“We’re currently studying a plan to expand into East Asia carefully,” said Edward Sirait, Lion Air’s general director on Monday. “It should be finalized by June or July next year. We would establish several new flights to the region after we get the traffic rights.”
Edward said East Asia offered several promising routes, especially to China, which would be the company’s main target. He said Lion Air was considering flights to Beijing, Shanghai, Seoul and Tokyo.
“China’s potential is massive because it has one of the fastest rates of economic growth in the world, as well as a huge population,” Edward said.
Based on the company’s earlier assessment, it would target the foreign tourist market with its China routes.
Routes to Japan and South Korea would be targeted more at business travelers because citizens of both countries have extensive business operations in Indonesia, he said.
“We also expect to capture the market for Indonesian migrant workers and fly them to China and Hong Kong,” Edward said.
Lion Air surpassed Garuda as the largest carrier of domestic passengers last year.
It began flights to Saudi Arabia in November, going head to head with Garuda in competition to fly hajj pilgrims, and ending the state carrier’s monopoly on the route.
Edward declined to disclose Lion Air’s estimated investment in its East Asia expansion plan, saying it has yet to be finalized.
“We will surely add new planes for the routes ... like Boeing 747-400s,” Edward said. “We will also likely find partners [in the region] to work with us.”
He added that negotiations with prospective partners had already begun.
Tengku Burhanuddin, secretary general of the Indonesia National Air Carriers Association, said Lion Air’s move was planned in preparation for the Asian Open Skies Agreement, set to take effect in 2015.
The agreement will see members of the Association of Southeast Asian Nations allow more competition in the airline industry. This means more airlines will be allowed to fly to more countries.
Lion Air’s move into East Asia would intensify competition between the two biggest Indonesian airlines, and would be good for consumers, Tengku said.
He predicted that to compete with Lion Air, Garuda would shift its focus to high-end passengers, while Lion Air would focus more on the budget market.
Garuda executives did not respond to repeated requests for comment on Monday.
PT Lion Air, Indonesia’s biggest domestic airline in terms of passenger volume, revealed on Monday that it is planning to expand its international routes next year.
Lion Air is considering flights to China, South Korea and Japan by mid-2010.
Analysts said the move would challenge main rival PT Garuda Indonesia’s dominance in the lucrative East Asia market.
“We’re currently studying a plan to expand into East Asia carefully,” said Edward Sirait, Lion Air’s general director on Monday. “It should be finalized by June or July next year. We would establish several new flights to the region after we get the traffic rights.”
Edward said East Asia offered several promising routes, especially to China, which would be the company’s main target. He said Lion Air was considering flights to Beijing, Shanghai, Seoul and Tokyo.
“China’s potential is massive because it has one of the fastest rates of economic growth in the world, as well as a huge population,” Edward said.
Based on the company’s earlier assessment, it would target the foreign tourist market with its China routes.
Routes to Japan and South Korea would be targeted more at business travelers because citizens of both countries have extensive business operations in Indonesia, he said.
“We also expect to capture the market for Indonesian migrant workers and fly them to China and Hong Kong,” Edward said.
Lion Air surpassed Garuda as the largest carrier of domestic passengers last year.
It began flights to Saudi Arabia in November, going head to head with Garuda in competition to fly hajj pilgrims, and ending the state carrier’s monopoly on the route.
Edward declined to disclose Lion Air’s estimated investment in its East Asia expansion plan, saying it has yet to be finalized.
“We will surely add new planes for the routes ... like Boeing 747-400s,” Edward said. “We will also likely find partners [in the region] to work with us.”
He added that negotiations with prospective partners had already begun.
Tengku Burhanuddin, secretary general of the Indonesia National Air Carriers Association, said Lion Air’s move was planned in preparation for the Asian Open Skies Agreement, set to take effect in 2015.
The agreement will see members of the Association of Southeast Asian Nations allow more competition in the airline industry. This means more airlines will be allowed to fly to more countries.
Lion Air’s move into East Asia would intensify competition between the two biggest Indonesian airlines, and would be good for consumers, Tengku said.
He predicted that to compete with Lion Air, Garuda would shift its focus to high-end passengers, while Lion Air would focus more on the budget market.
Garuda executives did not respond to repeated requests for comment on Monday.