Fast 5: Lion Air's Vendor Manager on Contract Changes
As Lion Air’s contract vendor manager, Ferry Utama is examining the Indonesian carrier’s maintenance contracts and figuring out what changes need to be made because of the pandemic.
What is Lion Air’s flight status?
The Lion Air group includes five airlines—Lion Air, Batik Air, Wings Air, Thai Lion Air and Malindo Air. We are operating about 300 aircraft, mostly Boeing 737-800ER and -900ER, along with Airbus A320-200CEOs and NEOs, A330-300CEOs and A330-900NEOs. We also operate ATR72-500 and -600 for Wings Air. For our flight school, Angkasa Aviation Academy, we operate Cessna and Beech aircraft.
Because of the flying restrictions, we are focusing on domestic flights. Today we are flying about 25% of our normal schedule but hope to get to 50% by the end of the year for the Lion Air Group.
During the pandemic, are you renegotiating any contracts?
I’m handle vendor management for engines, APUs and landing gears, the contracts of which aren’t changing, but for other components, we needed to renegotiate some power-by-the-hour (PBH) contracts considering that the aircraft utilization is less than the PBH requirements.
The pandemic has made us realize that we need to look at other aftermarket provider’s solutions—not just from OEMS.
What is your outlook for the aftermarket for the next year or two? Do you have any concerns about the supply chain?
The aftermarket could be different after the pandemic. Until there is a vaccine and all of the country authorities agree that we can travel easily, there will be travel difficulties. That means that we are trying to find the best aftermarket solutions but also find sources that are closer.
What is your outlook for 2021?
We are expecting travel to return mid-2021, when the vaccine is available and most of the countries are open for international travel, which will help stabilize the market.
What is your biggest challenge?
I think it could be a challenge to get slots for certain types of engine inductions because many airlines are trying to avoid high costs in the near future, which could create a shortage of slots from 2021-23.