Lion Air Reveals 'Premium' Airline Brand

Fast-expanding Indonesian low-cost carrier Lion Air has confirmed that its new full-service ‘premium’ airline division will launch operations later this year or in early 2013 under the Space Jet brand. The budget carrier has made great strides in the country since it launched operations in June 2000 and is now the largest internal operator in the archipelago, with a 41.7 per cent share of the domestic market.

The start-up venture will enable Lion Air to deviate away from its existing no-frills business model and will bring further competition into the local market. The new carrier is expected to initially operate six Boeing 737-900ERs which will be transferred from the orderbook of its sister carrier, but will grow to a fleet of 12 by the end of 2014. It will offer a two-class arrangement with a Business and traditional Economy offering.

Lion Air will not be alone in enhancing its presence in the domestic and international markets. National carrier Garuda Indonesia has ambitious growth plans, while Sriwijaya Airlines is also upgrading its own product with a Business Class service from this year. This is being achieved through the replacement of its older 737-200 and -300 varaints with newer -500 and -800 models; four of the latter are due to be introduced from March or April 2012 on international routes.

Meanwhile, a new entrant, Pacific Royale, is also planning to launch flights in February 2012. The carrier is majority controlled by Indonesian businesswoman Gunarni Gunawan – also majority shareholder of marketing company Travel Ventures International Express – with the remaining interest controlled by Indian investors, according to local media reports. It was awarded its operational licence in November 2011 and plans to launch flights from Jakarta’s Soekarno-Hatta International Airport next month initially with two Airbus A320s and two Fokker 50 turboprops.

To meet the Indonesian Transport Ministry’s revised operating requirements that every local scheduled carrier should have a fleet of at least ten aircraft otherwise it could face having its operating certificate revoked from the end of this year, Pacific Royale will add three more Fokker 50s and two further A320s to its fleet in the second quarter with another aircraft, possibly a widebodied A330 following later in the year.

The growth of the aviation industry in Indonesia has been impressive and their remains a large untapped potential. The number of domestic air passengers in Indonesia jumped to 38.3 million in the first nine months of this year, while the number of international air travelers rose 15 per cent to 8.1 million, according to Indonesian Central Statistics Agency data.