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AirAsia targets market share gains in Indonesia
July 19th 2019
Fifteen aircraft to be added over three years. Growth resumes after fleet was shrunk. Read More »
While much of Indonesian aviation grapples with over-regulation, high fares and fuel volatility, Indonesia AirAsia (IAA) plans to make market share gains.
IAA plans to add 15 aircraft over the next three years, with five annual additions growing its fleet from 25 to 40. This is fast growth and resumes expansion. About half of IAA’s fleet was added between 2011 and 2013. The IAA fleet peaked in early 2014 with 30 aircraft, but then aircraft were taken out in an unusual move for the AirAsia group.
The Garuda and Lion groups dominate domestic Indonesian aviation. IAA grew its domestic market share from 2.2% in 2017 to 3.2% in 1Q2019, according to government statistics. But IAA has excelled in the international market, where it was often the largest airline.
IAA received one A320 in June, will receive two in September and the remaining two by the end of the year, according to Sindonews. All subsequent additions will be A320s, implying IAA will receive A320s from other AirAsia affiliates as they receive A321neos. AirAsia in June revised its order book and has few A320s remaining for delivery.
Targeted passenger growth in 2019 is approximately 20%. IAA expects to expand on under-served routes, Deputy CEO of AirAsia Group, Bo Lingam, told Kontan. He did not say if the secondary approach was strategic or because of slot constraints at primary airports.
IAA could start service between Jakarta and Aceh next year, he said. Neither Citilink nor Lion serve the route. He told Kontan that Indonesia needs more low-cost terminals (LCCT), like the one recently added at Jakarta Soekarno-Hatta.
