Thai Lion Air Embarks On Major Fleet Build Up

28th Aug 2015

Thai Lion Air will embark on a fleet build up, increasing fleet base by another 15 new aircrafts before the close of 2016. Based on a recent assessment made by Centre for Asia Pacific Aviation (CAPA), this move could challenge Nok Air and other airlines who are also bent on increasing their fleet.

The airline did not disclose how many 737-800s and 737-900ERs would comprise the 15 additional aircrafts but it mentioned that for this year, the airline targets to purchase 5 new ones. The remaining 10 has been programmed for next year.

Meanwhile, Nok Air revealed that it is targeting a 32-strong aircraft fleet by next year. Of this total, 22 are 737-800s while 10 are turboprop-type jets. If targets are attained, the airline would have a higher seat capacity of 4,978 by 2016.

On the other hand, Lion Air's fleet build up would result to an expanded seat capacity of 6,318. Computations were based on the estimates that the airline will purchase five of each aircraft type (737-800 and 737-900ER) to fulfill its target of ten new aircrafts by 2016.

A slightly lower seat capacity of 6,008 will be achieved if Lion Air opts to acquire purely 737-800s during the same year. If targets are reached, Lion Air would surpass Nok Air in terms of seat capacity by more than 20%.

Notwithstanding the two airlines' expansion plans, both may not be able to top Thai AirAsia's current fleet strength. According to reports, Thailand's reigning budget carrier plans to attain a fleet count of around 50 aircrafts comprising of A320s. If this pushes through, its seat count would grow to 9,000 seats by next year.

CAPA noted that Thai AirAsia will be shifting its focus on international operations thus, new aircraft purchases would largely be used to boost international rather than local flight services.

CAPA reports that Thai AirAsia's shift in priority from local to the international market could give Lion Air some edge over the former at least in the domestic scene.

But some observers have pointed out that CAPA may have left out other critical assumptions that may have impact on Lion Air. Firstly, Lion Air's aircrafts have limited legroom versus other airlines. Secondly, the airline recently figured in a controversial teaser sales which earned the ire of consumers and a government agency. Observers opine that these could put a dent on the airline's image and influence client perception as well.

Recently, Lion Air commenced its Bangkok-Singapore flight service with a seat count of 3,000. It is the only international flight route regularly conducted by the airline so far. There are plans though to add flight service to China towards the end of the year and Lion Air is closely coordinating with Chinese officials to obtain the latter's go signal.

Based on CAPA reports, passengers availing of Thailand's domestic flight services have significantly increased over the years. From a 9.1 million passenger level in 2012, the figure has risen to 16.6 million in a span of two years. By end of 2015, CAPA estimates that this will grow further to 20 million.

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