Malaysia’s new budget airport takes off

The Kuala Lumpur International Airport 2 (klia2), which Malaysia calls the world's largest purpose-built low-cost terminal for low cost carriers, officially commenced operations on Friday with the arrival of Malindo Air Flight OD1027 from Kota Kinabalu at 12.05am.

The first aircraft to take off from the airport was a Cebu Pacific Airways flight (Flight 5J502) to Manila with time of departure of 3.15am.

Present at the airport to witness the historic moment were Deputy Transport Minister Abdul Aziz Kaprawi, Malaysia Airports Holdings Bhd (MAHB) chairman Dr Wan Abdul Aziz Wan Abdullah, MAHB managing director Bashir Ahmad and Department of Civil Aviation (DCA) director general Azharuddin Abdul Rahman.

'Goodie bags' distributed to the 110 passengers of the Malindo Air flight were also given to the 147 passengers on the Cebu Pacific Airways flight.

Earlier at 10.20pm on Thursday, the check-in process began and proceeded without any hitches.

The first passenger to check in, Gemma Camarinta, 39, who was travelling to her hometown in Bohol, Philippines said she was happy and excited to be part of the historical event.

A frequent user of the previous Low Cost Carrier Terminal (LCCT), she said the new hub was more comfortable, and easier to reach where one could use the Express Rail Link (ERL) straight to the terminal.

Another passenger, Ace Perez, 30, said compared to the LCCT, klia2 was much better because it was spacious, comfortable and clean.

"I like the route because it is easily reached from the highway. I am happy with this new building compared to LCCT because there, I had to walk very far to get to the aircraft," he said.

Meanwhile, MAHB in a statement said airlines starting to operate from klia2 on Friday were Malindo Air, Cebu Pacific Airways, Lion Air and TigerAir while AirAsia will move to klia2 by May 9.

MAHB expects 7,000 passenger traffic movements daily for the initial phase of operations, and 50,000 passenger traffic movements from May 9 onwards.

Gatewayklia2, which duals as a public transportation hub that has a fully gated car park which can accommodate 6,000 vehicles, ERL, taxi and bus service, and retail mall of 350,000 sq ft with over 200 outlets also commercially opened to the public on Friday, according to the statement.

MAHB said the LCCT will cease operations after May 9, and for the convenience of passengers, complimentary shuttle bus service between klia2 and LCCT will be provided from May 1 until May 15, and is available every 15 to 20 minutes.

The immigration, security and customs counters at LCCT will also continue to operate until May 9, and passengers are advised to contact their respective airlines to confirm details of their flights to avoid any inconveniences.

The klia2 is designed to handle 45 million passengers a year, replacing the LCCT which had a capacity for only 15 million passengers a year.

At a press conference after the arrival of the Malindo Air flight, Abdul Aziz said the opening of the terminal went very smoothly and as planned.

"We have proven that everything would proceed as scheduled as we had announced before. We are proud as this (klia2) has become the latest Malaysian icon," he said.

Abdul Aziz said the cost of the terminal was within the RM4 billion budget which had been allocated earlier, and that a total of 22 million passengers were expected to use the terminal this year.

He said the government was optimistic that more airlines would want to set up their operations there in the future.

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Malaysian carrier Malindo Air catches fire mid-air

A Malindo Air flight bound for Kuala Terengganu had to turn back to the Subang Airport on Wednesday morning after one of its engines caught fire.

The hybrid airline, in a statement, said the incident occurred as the aircraft climbed to about 7,000 feet (2,334 metres) soon after it took off at 7.30am.

It said the aircraft fire detection system was activated and the crew immediately carried out an emergency standard operating procedure to contain the situation.

"The captain decided to turn back to Subang and the aircraft landed safely at the airport. No one was hurt.

"All the passengers were later transferred to another flight for Terengganu," it said.

Malindo Air said the cause of the fire was being investigated and the incident was reported to relevant authorities, including the engine and aircraft manufacturer.

It was learnt that Terengganu footballers were among the passengers onboard.

They were returning home after their Super League match against the Armed Forces at the Selayang Stadiumon Tuesday night. Terengganu won 3-0.

A picture of the burning engine posted on a social media site by Terengganu midfielder Mohd Faiz Subri on Wednesday morning went viral.

The Terengganu Football Association website said the team took a replacement flight back to Kuala Terengganu at 10am.

Headquartered in Petaling Jaya, Malindo Air is a joint venture between National Aerospace and Defence Industries (Nadi) of Malaysia and Lion Air of Indonesia.

Midfielder Mohd Faiz, 28, said the passengers had the fright of their life when they heard an explosion, after which they saw one of the plane propellers catching fire just after taking off.

"I could only pray that nothing bad would happen to us. Furthermore, it was the first time I encountered this kind of emergency.

"All of us were quite in a panic, but the pilot and crew acted professionally to calm us down," he told Bernama at the Sultan Mahmud Airport on Wednesday.

Defender Mohd Zubir Azmi, 26, said he became frightened and nervous as he thought of the fate of passengers and crew of the ill-fated Malaysia Airlines flight MH370.

"After the plane landed safely in Subang we thought of going back to Terengganu by bus, but we took the replacement flight at 11.15am anyway," he said.

Commending Malindo Air crew for their professionalism, another passenger, Dietmar Gierlich, 31, who was on a work trip, said: "The crew asked the passengers not to panic and took very fast action. The passengers also co-operated well with the crew and every one had made things easier."

Dismissing a suggestion that he will not be flying by Malindo Air again, he said, "The situation could happen to anyone or any plane in the world."

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AirAsia X plans huge fleet expansion with US$418m IPO

Malaysian long-haul carrier AirAsia X said on Monday it plans to use funds of up to US$418 million from a public listing to more than triple its Airbus fleet and expand routes to meet demand in Asia-Pacific.

The budget carrier founded by aviation tycoon Tony Fernandes hopes to raise the proceeds in an initial public offering (IPO) ahead of its July 10 debut on the Malaysian bourse.

"The estimated amount based on the 1.45 ringgit (US$0.47) per issue share is between 1.1 billion ringgit and 1.3 billion ringgit," Nazir Razak, head of banking group CIMB which is running the IPO, told reporters after the prospectus launch.

AirAsia X had earlier cited a conservative amount saying the IPO could raise RM859 million (US$277 million) from the sale of 592.6 million new shares for between 1.15 to 1.45 ringgit each.

Analysts have said with last month's general election over, investors are looking for a wide range of stocks in Southeast Asia's third largest economy, sparking a fundraising fever in Malaysia.

AirAsia X chief executive Azran Osman Rani said the proceeds from the IPO would finance fleet and route expansion to cement its position in its core markets in Australia and Asia.

The carrier will take delivery of 23 Airbus A330-300 planes over the next four years beginning in July, while it has also placed a firm order for 10 A350-900s.

Detailing the airline's strategy, Azran said it will bolster its position in lucrative markets like Australia, China, Taiwan, Korea and Japan.

It would be followed by adding frequencies to current routes, opening new destinations including to Adelaide in Australia, Nagoya and Fukuoka in Japan and Busan in South Korea.

AirAsia X previously scrapped London flights because of the European debt crisis and focused on serving routes within Asia-Pacific, where sustained economic growth has swelled the middle class.

AirAsia X currently has 10 Airbus A330-300 planes and serves 14 routes across the region, including destinations in Australia, China, Japan and Saudi Arabia.

Azran also said with the arrival of more aircraft it would allow the airline to set up hubs in Thailand and Indonesia.

A hub in Thailand will allow AirAsia X to operate regular services from Bangkok to lucrative markets such as Australia, Japan and South Korea.

A third of the funds raised in the listing will be used to repay debt while another third is slated for capital expenditure, with the balance going to working capital and listing expenses.

Shukor Yusof, an aviation analyst with Standard & Poor's Equity Research in Singapore, has predicted the AirAsia X listing will be a success and the cash raised was "a good start to fund their fleet expansion".

The International Air Transport Association (IATA) has described Asia-Pacific as the world's fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 percent since 2006.

Meanwhile Fernandes dismissed the threat posed by Malindo Airways, an affiliate of Indonesia's budget carrier Lion Air, citing AirAsia's position as Asia's largest budget carrier with a strong balance sheet.

"We are in a very strong position. It will be tough for new airlines or future entrants into the market," he said.

Malindo Airways, however, has already sparked a price war by offering competitive fares with free snacks and luggage allowance. It currently serves domestic routes.

Profit-making AirAsia was Asia's first low-cost carrier to complete an IPO in 2004.

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AirAsia X survives and is ready to fight all competition in its ways. Fleet expansion with A330 and A350 will mean more ambitious plans ahead but one will also have to see how many of the old fleet are they de-registering upon receiving the new orders gradually. This big order will more or less put them on par with Scoot in terms of fleet size when Scoot starts receiving its order of 20 B787 starting 2014. The days ahead will mean better and more comfortable flights in big aircraft but not pay a premium price for it. The mainstream consumers will gain the most out of it.

Lion Air Considers Airbus Jets as It Looks to Expand Its Fleet

PT Lion Mentari Airlines said it is talking to Airbus SAS and Boeing Co. (BA) about a purchase of additional single-aisle planes beyond its order for 230 Boeing 737s last year.

“We are studying every possibility to fulfill our target for the planes from every manufacturer, including with Airbus,” PT Lion Air Commercial Director Edward Sirait said in a telephone interview. “So far we haven’t concluded which manufacturer, types and number of planes to buy. But all are possible.”

The Indonesian carrier needs more aircraft as it adds flights in a region where air travel is expected to grow more than 6.4 percent annually through 2031. Lion Air already flies to more than 36 destinations within Indonesia and overseas, and announced plans to establish a low-cost carrier in Malaysia to challenge AirAsia Bhd. (AIRA) in its home market.

Airbus spokesman Stefan Schaffrath said the Toulouse-based manufacturer doesn’t comment on talks with customers or potential customers.

The low-cost carrier, called Malindo Airways, will begin flights in May and may have about 100 planes within a decade, one of its shareholders said in September. Malindo Air will draw its fleet from planes Lion Air has ordered.

The record order for 230 additional 737s in February was worth $22.4 billion at list prices. The deal, which also included 150 options, was Boeing’s biggest in dollar value and plane numbers.

Lion Air didn’t say if it’s considering the Airbus A320neo, which will have more-efficient engines than the existing A320 and enter into service from late 2015. Airbus is still seeking customers to fill A320 delivery slots in 2015.

Airbus has generally lagged behind Boeing in Indonesia, one of the more promising markets for air traffic growth in coming decades. Lion Air itself has forecast passenger growth rates of 15 percent a year. The airline said last year that the parent company fleet may expand to 470 planes by 2025 from about 100.

Airbus is also looking to sell A380 superjumbos to flagship airline Garuda Indonesia. (GIAA) The airline said Nov. 21 it had received proposals from Airbus as well as from Boeing for its 747 Intercontinental. President Director Emirsyah Satar said the review of proposals was still at an early stage.

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Just when you thought they will not be ordering new planes for a very long time, Lion Air is now mulling on whether to try Airbus' A320neo. However when you consider Indonesia's aviation industry growth of 6.4% per year, the huge orders don't seem to be as crazy, even so when Lion Air's orders has to feed Malindo Airways too.

Malindo and Lion to absorb 600 unemployed pilots, hire up to 1,200 in five years

Finally some good news to a growing number of unemployed pilots. Malindo Air and Lion Air will hire more than 600 pilots from Malaysia for its operations over the next few months to years while its rivals are only hiring between 50 and 100 a year.

That's not all. According to PT Lion Grup president director Rusdi Kirana, the group has the capacity to absorb many more pilots and it can even hire up to 1,000 over the next five years.

“With all the aircraft orders that we have made, we certainly need pilots. It is not empty promises, it is real. We need pilots but it also depends on the pilots. They must have good skills, knowledge and the right attitude (before we can hire them),” he says in an interview with StarBizWeek.

He adds that “we are growing and we have placed an order for 381 new aircraft and that means we need pilots. And we are also thinking of ordering more aircraft.”

The airline group was in the limelight in February when it firmed an order to buy 230 aircraft worth US$22bil from Boeing and that purchase was said to be the single largest contract in commercial aviation history. It is because of that order, many within the aviation industry began looking at Lion Air seriously.

The PT Lion Grup owns Lion Air, Wings Air and Batik Air (to be launched in the second half of 2013) and has a 49% stake in Malaysia's Malindo Air.

“In a year, we will take delivery of 36 to 40 aircraft and for each aircraft we need five sets of pilots or 10 people. So we need to hire about 200 pilots each year and over five years we will need 1,000 pilots.

“On top of that, there will also be pilots who fall sick or go on leave, so we need 20% more. So in total, we can take up to 1,200 pilots over the five years, but it all depends on skills, knowledge and attitude,” Rusdi says.

There are over 1,000 unemployed pilots in the country who can't seem to pin down jobs because there is a limited number of vacancies and they cannot market themselves globally because they have too few flying hours.

But the emergence of Malindo Air has presented an opportunity for the trained pilots, some of whom have taken study loans from banks and are doing odd-jobs to service their debt and to make ends meet.

When news broke that Malindo Air was set up, the airline was flooded with enquires. In fact, when it conducted a walk-in interview early this month, throngs of people showed up for various jobs in the new airline. Among them were over 600 unemployed pilots who had travelled across the country for the interview.

“The airline is our fresh hope of fulfilling a career,” says an unemployed pilot who stood in line for three days for an interview.

Whether or not he gets the job will depend on him passing a written test, a psychometric test and a simulator test before he can ink a contract to fly for either Malindo Air, Lion Air or any other airline within the group.

However, they still need to attend aircraft type training which will initially be conducted in Jakarta and they will have to take loans which the group will help to provide. The training is essential to clock in the prerequisite flying hours with Lion Air before they can pilot for Malindo, which is expected to take off in mid-March next year.

To show its seriousness, the group will transport one simulator to Kuala Lumpur so training can eventually be done here.

Rusdi's strategy is a quick way of meeting the airline's needs, where instead of employing high school leavers to undertake training, he is hiring those who are already skilled and trained to undertake aircraft type and line training. That will help to save cost.

He acknowledges that “yes, it is a clever strategy but we are thinking of the long term. We could possibly take experienced pilots but then we would not be spending time to train the young pilots.”

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This is definitely great news to the fresh pilot grads in Malaysia and are still looking for their big break in an airline job. Lion Air means serious business with their unbelievably huge order of the new B737 back in February this year. Each plane will need minimally 10 pilots to operate and with the hundreds of planes coming in, it can only mean higher demand for pilots.

For those waiting for their opportunity, do not blow this chance.