Turbulent times for Indonesian carriers
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Times are tough for the little guys of Indonesia’s lucrative passenger aviation sector as larger firms with deep pockets enjoy a lion’s share of this tantalising growth market.
As Lion Air embarks on its aggressive domestic and regional expansion plan, the outlook for Sky Aviation and Tigerair Mandala appears turbulent at best.
Domestic airline Sky Aviation was forced to ground operations last week due to lack of funds, and is now in talks with a new investor to keep its fleet in the air.
Having started out as a charter service in 2010, the airline has grown into the commercial space through company and aircraft acquisitions. It currently has a fleet of 12 aircraft with a further nine on order, however plans may require adjustment as operations come to a temporary halt from 30 March, with no timeline for resumption.
Speaking to press last week, Sky Aviation general marketing manager Sutito Zainudin, said: “Yes, we are stopping our services temporarily. We are still waiting to have more discussions with new investors.”
Sky Aviation is not the Indonesian airline in distress however. Indonesian budget carrier Tigerair Mandala is struggling to cope with falling currency values and high fuel costs, forcing the company into service cuts.
So far this month, the airline has cut nine out of 20 routes and reduced frequency of two others in order to reduce overcapacity and boost yields across its network. In addition, Tigerair Mandala has also introduced a surcharge, designed to increase fares and improve financial performance.
This is a major setback for the airline which only resumed operations in April 2012 when Mandala received new investment and partnered with Singapore’s Tiger Airways.
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