Malindo Air Challenges AirAsia

31st Oct 2014

The Malaysian low-cost affiliate is on a fighting mode to square off with the budget behemoth, as it commences operations on one of Asia's busiest routes this month.

The Center for Aviation (CAPA) says in its report that Malindo Air's upcoming routes will be between Indonesia and Singapore where AirAsia has been dominating for years. Singapore-Jakarta and vice versa is one of the most lucrative air routes in Asia which any airline would readily exploit.

The Malaysian subsidiary started off with a thrice-daily frequency on the Kuala Lumpur-Singapore route last November 3. This provides an instant 3,400 seats per week in each direction for Malindo Air, a share of 7% of the total seat capacity for this route.

Already, seven airlines operate in the busy Kuala Lumpur-Singapore route providing combined weekly flights of 240 in each direction. This translates to more or less 85,000 seats each week on both directions.

The operation of Malindo Air will certainly crowd the route but the airline is bent on taking on the challenge valiantly laid out by its more established rivals such as the low-cost leader, AirAsia.

Currently, the route is dominated by Malaysia Airlines capturing a sizable 28% of the pie. AirAsia is not far behind with a 26% share while Singapore Airlines, through Silkair, is inching its way to overtake AirAsia, with 25% market share.

Other airlines which snare a significant share include Jetstar Asia and Tigerair who manage to grab 12% and 8% of the pie, respectively. The rest is shared among the smaller operators.

According to CAPA's report, the fierce competition on the route has already taken its toll on the operators. AirAsia, for instance, has reduced its daily frequency from a high 13 flights until last year when it went down to the current 10 flights.

Jetstar, on the other hand, has pared down its weekly frequency from 50 flights down to 30 currently. Tigerair Singapore, on its part, trimmed down its weekly frequency from 28 to the current 23 flights.

Being a subsidiary of Lion Air group which is based in Indonesia, Malindo Air has an edge over its rivals to add capacity to Singapore with possible flights from Indonesian cities.

The Singapore-Jakarta route, for instance, is already the world's busiest low-cost route offering 47,000 weekly seats.