Monday, December 9, 2013

Malindo Air aggressively expands to India & Bangladesh....Easy Lion!

Malindo Air, the hybrid airlines of Malaysia has announced to expand its operation to four cities in India; Delhi (30th December 2013), Mumbai (15 February 2014), Trichy (2nd January 2014) and Ahmedabad (27 January 2014)[1,2]. All destination will serve daily basis except to Ahmedabad (operates 4 weekly flights) and all routes will operate by Boeing 737-900ERs. The expansion of Malindo air has intensified route between Malaysia and India. Till right now, three airlines are currently operating between two countries and there are: Malaysia Airlines, Air Asia and Air India Express [3].



Figure 1: Future and current routes served by Malindo Air from its hub in Kuala Lumpur [2]

Based on Table 1 and Figure 2 shows that, Malaysia Airlines is the airline serves more Indian cities and offers more seats capacity than other airlines, which represents 45% of the market.  Besides that, Air Asia is second largest airlines in the market which represents 35%, is serving mostly to southern cities of Trichy, Bengaluru and Chennai; and Kolkata in Northern East of India. Air India-Express, the low cost unit of Air India however, is the smallest airlines on Kuala Lumpur-India, as the airline offers limited seats and operates from Chennai. Table 1, shows the Kuala Lumpur-India routes served by Malaysia Airlines, Air Asia, Malindo Air and Air India Express. Meanwhile Figure 2 shows, percentage of seat capacity between Kuala Lumpur and India served by the airlines.

Table 1: Kuala Lumpur-India routes served by Malaysia Airlines, Air Asia, Malindo Air and Air India Express[3].
Route/Airlines
Malaysia Airlines
Air Asia
Malindo Air
Air India Express
Kuala Lumpur – Delhi
14

7

Kuala Lumpur – Mumbai
12

7

Kuala Lumpur – Kolkata

7


Kuala Lumpur – Chennai
14
14

5
Kuala Lumpur – Trichy

21
7

Kuala Lumpur – Bengaluru
12
4


Kuala Lumpur – Kochi
7
7


Kuala Lumpur – Hyderabad
7



Kuala Lumpur – Ahmedabad


4


Figure 2: Percentage of seat capacity between Kuala Lumpur and India served by the airlines[3] (cited on 9 September 2013)

As Malindo air will introduce in Kuala Lumpur-India market, the airline will represent 17%, making the airline as third largest airline in the market. However, the airline is facing competition from other Malaysia Airways on three routes. On routes from Kuala Lumpur to Delhi and Mumbai, Malindo air will compete with national carrier-Malaysia Airlines. Malaysia Airlines is already establishes and dominates on these routes. Malaysia Airlines offering 14-and 12- a week flights to Delhi and Mumbai by operating mix of Boeing 777-200 ER and Boeing 737-8 as compared to Malindo air which offers daily flights on each route, using 180 seats of Boeing 737-900ERs.

Besides that, Malindo air is also facing fierce competition with Asia’s largest low cost carrier, Air Asia on Kuala Lumpur – Trichy route. The route is actually the first Indian route served by Air Asia and currently, is operating thrice daily flights on this route with total capacity of 3780 seats as compared to Malindo Air’s (1260 seats). However, Malindo Air is a hybrid airline, which is focus different market from Air Asia’s (low cost/budget travellers). Malindo Air’ Boeing 737-900ERs are equipped with two cabin classes: Business and Economy classes. Malindo Air’s Business class product offers 45” seat pitches and installing with a personal inflight entertainment (IFE) on every seats. For Economy class, Malindo Air is offering standard economy class with low- cost price. Each seat is also equipped personal IFE. Based on both fares (on economy class-31 January 2014) indicates that Air Asia (RM 321) offers cheaper fare by 25.6% as compared to Malindo Air’s (RM 429)[4,5]. Figure 3, shows the Malindo Air’s routes that will compete with Malaysia Airlines and Air Asia.

Malindo Air has not direct competition on Kuala Lumpur-Ahmedabad route as other airlines do not serve between these cities. Anyhow, the airline may face indirect competition with Singapore Airlines on Ahmedabad- Asean. Singapore Airlines is flying from its home based in Singapore and utilizing Airbus 330-300s and operates three weekly basis. Moreover, based on Wikipedia.com[6] stated that Thai smile, regional arm of Thai Airways International is also operating to Ahmedabad. However, the airline reportedly temporary suspended due to unclear reasons.

Figure 3: Malindo Air’s routes that will compete with Malaysia Airlines and Air Asia by comparing seats number.

Figure 4: Malindo Air's Iatest promotion to Indian cities [5]

Malindo Air has launched destinations to Dhaka and plans to Chittagong
Besides expanding its operation to India, Malindo Air has already launched daily flight to Dhaka, the capital city of Bangladesh. The introduction of the new service has intensified competition among airlines served. Currently there are four other airlines serving on this route, they are: Malaysia Airlines, Biman Bangladesh, United Airways of Bangladesh and Regent Airways[3]. Based on Figure 4 shows that, Malaysia Airlines is also dominates on this route which represents 51% of total capacity. Followed by Biman Bangladesh, Malindo Air, Regent Airways and finally, United Airways. The reason Malaysia Airlines dominates on this route due to numbers of frequency, which is the airlines flying 15 times a week and using large aircrafts of Boeing 777-200ER and Airbus 330-300 (as well as Boeing 737-800)[7]. 

Figure 5: Percentage of seat capacity on Kuala Lumpur-Dhaka by airlines

Anyhow, Malindo Air is not facing with competition on Kuala Lumpur-Chittagong route . Chittagong will be second Bangladeshi cities as the airline starts its operation from beginning from 16th January 2014 and operating thrice weekly flights. Chittagong is Bangladesh’s second largest city and populated by 6.5 million people and an important cities for commercial, industrial and financial. Moreover, Chittagong Port is the one of busiest port in Bengal Bay and Indian Ocean[8]. According to the airline’s website, the airline will offer RM 399 for one way (for all Kuala Lumpur- Bangladesh route in economy class)[5].
Figure 6: Malindo Air's latest promotion to Bangladeshi destinations
References
[2] Wikipedia.com- Malindo Air
[3] KLIA timetable
[4] Air Asia’s website
[5] Malindo Air’s website
[6] Wikipedia  Ahmedabadairport
[7] Malaysia Airlines timetable
 [8] Wikipedia.com-Chittagong





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