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.