Tuesday, September 11, 2012

Lion Air Takes Fight to AirAsia’s Malaysian Home

PT Lion Mentari Airlines, the Indonesian carrier that placed a record order with Boeing Co. this year, is extending its challenge in Southeast Asia’s budget travel market to Malaysia, the home of rival AirAsia (AIRA) Bhd.

Lion Air-backed Malindo Airways will sell tickets at prices matching “or maybe lower” than AirAsia’s, Lion Air President Director Rusdi Kirana said in Selangor near Kuala Lumpur yesterday. It will begin services in May and plans to fly to countries including Thailand, China, India, Japan and Australia, besides operating in Indonesia and Malaysia.

Lion Air’s Malaysia entry follows AirAsia Group Chief Executive Officer Tony Fernandes’ decision to relocate to Jakarta in June to focus on regional expansion. The move pits Boeing’s record customer against the biggest buyer of Airbus SAS narrow-body planes as Lion Air and AirAsia compete for budget travelers in Asia. The region’s total air travel may grow 6.4 percent a year through 2031, spurred by economic growth, according to Boeing.

“Lion Air may be doing this more in response to AirAsia expanding into its own turf in Indonesia,” said K Ajith, head of regional aviation at UOB Kay Hian Research in Singapore.(Bloomberg)

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