Thursday, September 13, 2012

Malindo vs Airasia

I think if the drop (from RM3.30 to RM2.95) in Airasia's shares are to be taken as a signal due to the launch of Malindo Air, do take a note of the joint venture. Based on track record, the JV party who probably would be bringing more food onto the table i.e. giving a threat to Airasia is the Indonesian party - Lion Air, not NADI. However do check on Lion Air in wikipedia.

I have mentioned before that a probable factor that Airasia is able to have a stronger presence in Indonesia is due to airline safety in Indonesia. The track record of airline safety in Indonesia is poor and probably the government of Indonesia felt that it needs to improve on that. Airasia is a Low Cost Airline but it is an airline with good track record in terms of airline safety. It is a private airline. It does not have the baggage of a "Scoot" partly owned by SIA, which has a low chance of getting into another country's airline ownership. SIA has tried owning a Chinese airline before and the attempt was rejected by the Chinese government - an example.

The more I looked (or searched) at Malindo Air, the more I think this is just a scare to show to Airasia that if Airasia can move some of its operations to Indonesia, the Malaysian government can do the same i.e. attract an Indonesian airline to partner with a local Malaysian here. The problem is though that this Indonesian airline does not have the standing of Airasia.

I am just thinking - is this due to open skies policies or more of a "dare" thing...whatever it is, competition is good. However I felt this is more like - if you attack my base, I will attack your base back kinda thingy?

5 comments:

Benson said...

Hi Felicity, wat price range u think best to enter, 2.4-2.6? Thx ya.

felicity said...

That's a good price

khengsiong said...

Malindo says it will offer in-flight entertainment and wifi in the cabin. At the same time it promises cheaper airfare compared to AirAsia. But I am skeptical...

BTW, do you think Indonesia AirAsia will be 'localized', and become as lax in safety as other airlines in the republic?

felicity said...

Hi Kheng Siong

i do not think so.

lweiloon said...

My colleague from Indonesia comments that even local do not dare to take Lion Air flight.

However cheap is the ticket price, if my safety is not guaranteed when I travel with them, I rather pay higher price.