Thai Lion – the new Thailand affiliate of Lion Air

Lion Air Group is aiming to launch a new affiliate in Thailand by the end of 2013, according to new airline reports released recently, with an initial fleet of two 737-900ERs based at Bangkok’s Don Mueang Airport.

Thai Lion will initially serve two international routes – Kuala Lumpur and Jakarta – and Thailand’s second largest domestic route, Bangkok-Chiang Mai. With Kuala Lumpur and Jakarta, Thai Lion will be able to leverage the hubs of its sister carriers.

The new carrier will compete primarily against Thailand’s two existing LCCs, Thai AirAsia and Thai Airways’ low-cost affiliate Nok Air. Both are based at Don Mueang and serve Chiang Mai while AirAsia is the market leader between Bangkok and Kuala Lumpur and also serves Bangkok-Jakarta.

Thai Lion is currently in the process of being certified by Thai authorities. The carrier has been allocated two of the six 737-900ERs the Lion Air Group is slated to receive in 4Q2013. Thai Lion aims to begin revenue flights by the end of the year, pending regulatory approval.

Lion is expected to own 49% of the new carrier, under its parent company Malindo, which launched services in March 2013 with a majority 51% stake held by Malaysian company NADI. Lion has not yet disclosed its partner in Thailand. The partner has only been privately identified in applications with Thai authorities and will be formally revealed if the carrier succeeds at securing an air operator’s certificate.

AirAsia is the LCC leader in Thailand but accounts for only about 15% of total seat capacity, or approximately one-third the share it enjoys in Malaysia. AirAsia currently accounts for about 52% of Thailand’s LCC capacity, including 43% for Thai AirAsia, while Nok Air accounts for about 25%.

Rusdi Kirana, the airline’s CEO disclosed that the carrier also has long considered Thailand, along with Australia, for its overseas expansion through setting up of local subsidiaries. In fact, aside from the recent formation of its Thai subsidiary, it has also struck a deal with an Australian airline.

The airline is also contemplating on expanding its business in other countries by forging a partnership with local counterparts to set up local subsidiaries.

Early this year, Lion Air, surprised the aviation world when it placed an order of 234 A320s, the biggest in history by a single order, in addition to the 230 Boeing aircraft it earlier ordered in 2011.

Lion Air currently flies to 79 destinations using an all-Boeing fleet of 92 aircraft.