Lion Air may one day establish an off-shoot in Singapore.
The Indonesian low-cost carrier’s president director, Rusdi Kirana, told Singapore Government-controlled TV station Channel News Asia that: “If the Singapore Government gave me a chance to set up an airline in Singapore, I would do it.” Lion is Indonesia’s largest privately-owned carrier but – unlike its competitor AirAsia – it has no associate carriers in other countries. If Lion were to establish a low-cost carrier in Singapore it would be competing against other Singapore low-cost carriers such as Tiger Airways and Jetstar Asia.
When asked about Rusdi’s remarks, a senior executive at Lion - who wishes to remain anonymous – told Aviation Week that: “Rusdi is serious when he talks about setting up an airline in Singapore. Singapore is always approaching us about why don't we make use of Indonesia’s fifth-freedoms through Singapore.” Lion currently does this with its Jakarta-Singapore-Ho Chi Minh City, Vietnam service. “But the fifth freedoms are nearly all used up, so we’ve been saying ‘why don't you give us a Singapore AOC?’ and we can bring Indonesian traffic to Singapore and beyond. Indonesia has 220 million people and Singapore wants more traffic, so Indonesia represents a big opportunity for them.”
To establish an airline in Singapore, Lion would need to apply for a Singapore air operator certificate (AOC) and find a local partner. Under Singapore law, all Singapore-designated carriers must be 51% locally-owned. The Lion executive says they are fully aware of this requirement, but so far have yet to identify a local partner.
Once it received an AOC, it would then need to apply for Singapore air traffic rights by applying to Singapore’s Air Traffic Rights Committee. Singapore’s transport ministry established the committee in 2003 to allocate Singapore’s air traffic rights.
Jakarta-Singapore is already the city-state’s busiest international route and currently Singapore has used up all its traffic rights to the two most popular Indonesian destinations: Jakarta and Denpasar (Bali). If Lion were to have a Singapore carrier though, it could make use of Indonesia’s traffic rights by having its Indonesian airline codeshare on its Singapore carrier.