27th May 2013
Indonesia's Lion Air is now making its entry into the Thai aviation market official with the set up of its local subsidiary, Thai Lion Air.
The newly-formed airline is now starting to hire cabin crew and ground staff in addition to pilots for its maiden service expected to commence soon this year.
The budget airline will operate from its base at Don Mueang International Airport and will deploy no less than six single-aisle twin engine aircraft, the Boeing 737-800 for its initial service.
The Civil Aviation Department official recently confirmed the formation of the Lion Air's local Thai subsidiary though it has yet to receive application from the said company a license to operate.
The local subsidiary is a joint venture between the Lion Air of Indonesia and its Thai counterpart which is still under wrap. The joint venture requires a total of 51% by a local investor.
Though Phuket Airlines was rumored to have been the mysterious partner of Lion Air in its Thai venture, it was quickly quashed by Woradej Harnprasert as untrue.
The founder and owner of Phuket Airlines, Vikrom Aisiri, also a former senator, is focused on the charter services.
The entry of Lion Air into Thai market will further expand the field but will possibly narrow the shares of the competing airlines depending on how they will perform.
Thailand has already three low-cost airlines operating: Thai Air Asia, Nok Air and Orient Thai. Orient Thai, though, has seen its scheduled operations downsized in recent years.
Mr. Woradej said that the entry of Lion Air in the local market will be a boon to the travel market as travelers will have more choices which would result to cheaper tickets. He further said that Thailand keeps an open-sky policy to attract foreign airlines to operate in the country.
The new airline is planning to operate domestic flights as well as regional service to neighboring countries.
The Indonesia-based budget airline signified its entry in Thailand in 2007 through a joint venture with One-Two-Go airline but never took off for unknown reasons.
Rusdi Kirana, the airline's CEO disclosed that the carrier also has long considered Thailand, along with Australia, for its overseas expansion through setting up of local subsidiaries. In fact, aside from the recent formation of its Thai subsidiary, it has also struck a deal with an Australian airline for the acquisition of 49% on the latter.
The airline is also contemplating on expanding its business in other countries by forging a partnership with local counterparts to set up local subsidiaries.
Early this year, Lion Air, surprised the aviation world when it placed an order of 234 A320s, the biggest in history by a single order, in addition to the 230 Boeing aircraft it earlier ordered in 2011.
Lion Air currently flies to 79 destinations using an all-Boeing fleet of 92 aircraft.