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Published: Thursday June 6, 2013 MYT 1:58:00 PM

Malindo Air upbeat on sustainability of pricing strategy


KUALA LUMPUR: Budding hybrid carrier, Malindo Air, is optimistic that it can stir the much-monopolised Malaysian aviation market, with its sustainable, market-driven cost structure and ticket pricing strategy.

Malindo Airways Chief Executive Officer Chandran Rama Muthy said the airline believed that the current low air fares that it offered was sustainable under the controlled cost structures.

This is in contrast to several analysts and aviation experts' opinion that the low ticket prices dished out by Malindo Air is not sustainable fiscally due to high operational cost.

Chandran said in the airline business, there were four main cost components - aircraft, maintenance, fuel and organisational expenditure.

"In the case of Malindo Air, we are very lucky as we have two great big brothers (parents) Lion Group and NADI (National Aerospace & Defence Industries Sdn Bhd).

"Through both parents, Malindo Air has saved tremendous cost as Lion Group has the largest order of Airbus jet aircraft while NADI, is an aircraft maintenance expert," he told Bernama.

He said Malindo Air was also planning to leverage on Lion Group, which operated Indonesia's Lion Air, to purchase aircraft spare parts at a more economical price.

Asked on whether Malindo Air's pricing strategy would be consistently low, Chandran said it depended more on the supply versus demand ecosystem.

"If the demand is big, automatically the price will be competitive. Lets wait and see. I would like to prove through my actions, rather than words," he stressed.

Malindo Air, which began service in late March 2013, is seen by many as a threat to both Malaysia Airlines and AirAsia from the product and low fares standpoint.

Currently, Malindo Air's fleet of two Boeing 737-900ER which flies out of the KL International Airport (KLIA) in Sepang, currently operates three flights daily to Kuching and three flights daily to Kota Kinabalu.

Malindo Air also flies out from Subang to Kota Baharu, Penang and Johor Baharu while three more East Malaysia routes are also on the cards soon. The airline was also looking to commence its maiden international flights to India and Singapore by August.

Malindo Air also expects to have a fleet of 10 jets and four ATR turboprop aircraft by year-end. - Bernama

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