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Lion Air Sets up Thai Subsidiary
6th Nov 2013
The new affiliate airline, Thai Lion Air, is tentatively scheduled to take off before the end of this year. The joint venture between the Indonesia-based Lion Air Group and its Thai partners will operate from its hub in Bangkok.
Like any joint venture with a foreign-based airline, TLA is majority owned by Thai partners while the 49% of the THB200 million equity is owned by Lion Air Group. The amount represents the initial capital required by the Civil Aviation authorities of Thailand for an airline start-up.
The new airline will commence commercial operations tentatively in December with an inaugural flight from Bangkok to Jakarta. Soon thereafter, routes to Kuala Lumpur and Chiang Mai will also be launched, also from the Thai capital.
According to Darsito Hendro, the airline's Chief Executive Captain, the budget carrier will operate from its hub at Don Mueang International Airport, promoted as the hub for low-cost carriers.
The maiden service, a Bangkok-Jakarta flight, will be a regular scheduled service on a twice-daily frequency using the narrow-body B737-900ER aircraft. The Bangkok-Kuala Lumpur will be a once-daily affair while the Bangkok-Chiang Mai link will be a three-times daily service.
Like its mother unit Lion Air, TLA will follow the budget business model offering a wide segment of the market with its affordable tickets.
The airline is taking advantage of the proposed ASEAN Economic Community initiative which is to take effect in 2015. It is seen as the easing of restrictions of the region's economic activities among member-countries allowing the free movement of products and services across borders.
Thai Lion Air recently took delivery of its first aircraft, a new B737-900ER, early this month. The narrow-body aircraft can accommodate up to 215 passengers in an all-economy class configuration.
Among its ambitious plans is the acquisition of 50 aircraft in 5 years until 2018. Before the end of next year, it will take delivery of another 8 planes of similar type in addition to the 2 aircraft currently in its fleet in preparation for its inaugural operations.
The fleet expansion will support its route network expansion with the opening of more routes to India and China before 2015. Possible destinations in China include Guangzhou and Shenzhen while possible routes to India include Delhi and Mumbai.
Thai Lion Air is also planning to open routes to Korea and Japan in 2016 using a pair of B787-8 aircraft which it will lease from its mother unit. The Lion Air Group has an outstanding order for 5 B787-8 aircraft with an option of 5 more from Boeing company.
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