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Comments for Wee Choo Keong

Comments for Wee Choo Keong

Comment on Malindo Airways is good for consumers by abeeonawindow

Posted: 23 Oct 2012 08:42 PM PDT

More than meets the eye with Malindo.

Nice for the consumers and perhaps employment generally in Malaysia, but by TF’s lead suggesting it’s cheaper to run/manage an airline out of Jakarta why on earth would Lion want to mix it up in Malaysia whereby it is presumably a bit more expensive? If this is a sacrifice on Lion’s part then who is gaining what advantage on both sides of the fence?

I can’t guess what the Malaysian (NADI/AIROD/etc) side is gaining from the deal (other than money obviously), but Lion is supplying a lot of assets towards this JV – multiple 737NG, potentially 787 in due course. One could reason all those aircraft Lion ordered have to park somewhere, they can’t just sit in Seattle while Lion struggles to find enough pilots to crew them, so why not park some at KLIA2 and do some work while they’re there. Good idea no – of course! You buy an asset, put it to good use. Even Tony knows this. The fleet will be Malaysian register (9M) – that’s nice isn’t it? Fly the Malaysian flag around a bit more always good for the country ya. The management will be Malaysian of course – the airline is a Malaysian entity (AOC to be issued by DCAM) after all – seems okay. So why again is Lion doing this? Because they’re feeling generous or want to give Tony the finger? (Well perhaps the latter.)

Lion wants to expand abroad, like AA vs MH they want to take on Garuda, but Garuda has one advantage – European landing/over-flight rights (and after JOG, GA had to battle to win those rights back). Lion’s reputation still precedes them and they still have a ways to go to be truly safe. No amount of LOSA etc is going to solve that in the short term; but hey – Malaysia has a pretty good standing globally in so far as safety is concerned. Why not piggyback back on a Malaysian operation to get what they currently can’t acquire with aircraft deals, money or politicking with the US. If this is the case, and I’m only hypothesizing, Lion gets approved one day through their collaboration efforts? Anyone think they’ll stick around in the JV? Business is business after all, costs will only continue to rise over time and Malindo will exist in a market niche which is cost sensitive. And of course don’t forget who owns the aircraft – 9M is just a registration mark. Impounding disputed aircraft still disrupts an operation, maybe grounds it.

So MAHB gets a new friend, AIROD gets busy, MATTA has something else to sell now, etc the list goes on. Does it impact MH and/or AA? Methinks both. While new carriers generally generate new traffic for a while not all of it sticks for the long term and people will be choosey. In spite of their various benefits, passengers have much to complain about in AA and MH, that will always translate to feet heading out the door. Malindo seems to want to exist in the gap between full LCC and full service which probably will appeal to many; ranging from those who expect a little more but don’t see why they should pay fee after fee to get it, to those who are willing to sacrifice some creature comforts (but not so low as AA) to save some money and not be treated like a leper. MH should be wise for a change and Tony should shut-the-****-up saying that it won’t affect AA. Both need to wake up and smell the roses.
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