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Lion Air Mulls Thai Low Cost Affiliate
27th Sep 2013
The dominance of Thai AirAsia in Thailand's domestic market will soon be challenged by another player, this time a hybrid of Indonesia's Lion Air.
The Lion Air of Indonesia operates the country's largest privately-run airline and the largest airline in terms of domestic market share.
The Jakarta-based low-cost carrier is eyeing to launch another budget airline outside its home country of Indonesia, this time in Thailand.
In September of 2012, Lion Air similarly formed a Malaysian subsidiary called Malindo Air and had its inaugural flights six months later in mid-March 2013. Malindo Air is its first local subsidiary in a foreign country.
The Thai subsidiary, called Thai Lion, is expected to take off before the year ends with a fleet of two B737-900ER aircraft. It would be operating from Bangkok's Don Mueang Airport, designated as the airport for low-cost carriers flying into and out of Bangkok.
Like its mother unit, Thai Lion will follow the same business model as a budget airline taking on Thailand's more established budget carriers such as Thai AirAsia, Nok Air and Orient Thai and a few other foreign-based LCCs already serving Thailand such as AirAsia, Tigerair, Jetstar Asia and Orient Thai.
On its inaugural operations, Thai Lion will initially fly to two international destinations and one domestic route out of its hub in Bangkok. The airline is eyeing Kuala Lumpur and Jakarta for the two overseas destinations and Chiang Mai, Thailand for the domestic route.
The new Thai subsidiary is awaiting approval of its application for certification from Thai authorities. It is expected to take delivery two of six B737-900ER aircraft in the last quarter of this year for its scheduled inaugural service.
Though the Lion Air Group officials remain mum about their Thai partners, it is expected to own a maximum stake of 49% in the joint venture with the rest from local partners. It will soon disclose its Thai business partners after securing its license to operate from Thai authorities.
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