Indonesia’s Lion Air has signed an agreement to form a new low-cost carrier based in Kuala Lumpur.
Malaysia’s Bernama news agency reported that a joint venture with KL-based National Aerospace & Defence Industry (NADI) will see the creation of Malindo Airways.
“The JV will see NADI holding a 51% stake with the remaining shares belonging to PT Lion Air,” The Indonesian carrier’s President Director, Rusdi Kirana told a media briefing on Tuesday (11 September).
The new airline is expected to start operations in May 2013 and will initially operate a fleet of 12 Boeing 737 aircraft from Kuala Lumpur International Airport 2 – the new budget terminal currently under construction near the Malaysian capital. This fleet size however, is expected to jump to 100 in the next few years as the airline starts receiving aircraft from Lion’s huge order for 230 Boeing 737 aircraft, which it placed earlier this year.
Malindo Airways will become the fourth airline in Lion Air’s portfolio. Its mainline Jakarta-based carrier operates domestic and short-haul international services, while low-cost subsidiary Citilink flies to more second and third tier Indonesian cities. It is also planning to launch a new full-service carrier, Batik Air, which is expected to commence operations next year offering flights to countries such as Australia, China and the Middle East.
Malindo Airways will compete directly with KL-based AirAsia, offering low-cost flights on domestic and regional routes to destinations in Southeast Asia, India and China. The move follows AirAsia’s recent decision to acquire Jakarta-based Batavia Air, as it moves to consolidate its position in the Indonesian market.