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Lion Air set to boost performance
JP/13/lionair

Lion Air to increase fleet by 60 percent

Tony Hotland
The Jakarta Post/Jakarta

Domestic budget carrier PT Lion Mentari Airlines said on
Sunday that it would increase its fleet by over 60 percent with
the purchase of another 15 aircraft.

"We've just completed the payment for the new aircraft. All of
the payment came from our internal cash, and there were no loans
from banks. Some of the aircraft were purchased, while some were
only leased," Lion spokesman Hasyim Arsal Alhabsi told The
Jakarta Post.

He said that the 15 new aircraft were ordered from U.S.
conglomerate General Electric, but refused to disclose the
purchasing and leasing costs for the new planes.

"Five of the new planes are of the ND-90 type with a capacity
of 170 passengers, while the remainder are of the 737/400 type
with a capacity of 158 passengers," added Hasyim.

With the new aircraft, all expected to have been delivered by
June 2005, Lion will have 39 aircraft in total.

The new aircraft will either serve new routes or increase the
frequency of existing ones. Lion is preparing to fly to new
destinations both domestically and internationally.

"We expect by December to fly to Semarang, Jambi, Bangka
Belitung, Gorontalo, several cities in the Papua, and others in
the eastern Indonesia. However, we have to take into account the
availability and compatibility of airports in those cities,
especially for our type of planes," said Hasyim.

Regional destinations that will be put on Lion's list of
service for this year are South Korea, India, Hong Kong,
Guangzhou and Australia via Denpasar, he added.

"With these new routes, we hope to be able to serve up to 60
routes by next year from the current 40 or so, and increase our
flight frequency to 200 flights per day from the current 140,"
said Hasyim.

He asserted that the expansion plans were also to help
minimize the cost per passenger so that the carrier would not
have to raise fares despite the ever-increasing global oil
prices, which have adversely affected jet fuel prices.

"All of these moves are efforts to increase productivity so we
can reduce the cost per passenger. If we raise fares, we'll have
the risk losing passengers and that's an even worse situation. It
is better to collect less revenue than lose passengers," said
Hasyim.

Lion, he added, was also still moving ahead with its plan to
offer its shares to the public next year through an initial
public offering scheme.

"But I assure you that the plan is not aimed at raising cash
from the public, but as sort of a gratitude to the public because
we want them to have a piece of this good company," Hasyim said.

Established in 2000, Lion is one the pioneer budget airlines
in the country. Now, it is the country's third largest airline in
terms of fleet size after state-owned companies Garuda Airlines
and Merpati Airlines.

According to their own data the airline has been averaging
some 500,000 passengers per month this year, up from between
300,000 and 400,000 per month last year. Its load factor now
reaches between 91 and 96 percent.