Lion Air, Indonesia’s biggest private airline revealed it is planning to expand its international routes next year. Lion Air is considering flights to China, South Korea and Japan by mid-2010. Analysts said the move would challenge main rival PT Garuda Indonesia’s dominance in the lucrative East Asia market.
Lion Air is considering flights to Beijing, Shanghai, Seoul and Tokyo. China’s potential is massive because it has one of the fastest rates of economic growth in the world, as well as a huge population.
Based on the company’s earlier assessment, it would target the foreign tourist market with its China routes. While routes to Japan and South Korea would be targeted more at business travelers because citizens of both countries have extensive business operations in Indonesia.
Lion Air surpassed Garuda as the largest carrier of domestic passengers last year. It began flights to Saudi Arabia in November, going head to head with Garuda in competition to fly hajj pilgrims, and ending the state carrier’s monopoly on the route.
GNFI humbly suggest that Lion Air should purchase long-haul aircraft to serve those planned routes, and it should be other than Boeing 747-400 due to its low mileage and fuel consumption. GNFI would like to recommend either Airbus A330 or Boeing 777. For cost-saving wise, Airbus is better.
Lion Air’s move was planned in preparation for the Asian Open Skies Agreement, set to take effect in 2015. The agreement will see members of the Association of Southeast Asian Nations allow more competition in the airline industry. This means more airlines will be allowed to fly to more countries. Lion Air’s move into East Asia would intensify competition between the two biggest Indonesian airlines, and would be good for consumers.