Indonesia’s Lion Air launches Thai unit, vows low-fare strategy

Lion Air, Indonesia’s largest low-cost carrier, yesterday announced it was ready to play an aggressive role in the Thai market, with the introduction of “truly low airfares” to attract big numbers of passengers.

The Jakarta-based carrier will launch its inaugural flight from Don Mueang to Chiang Mai on December 4, with twice-daily service. It started selling tickets last week and has received a good response, with more than 10,000 seats booked already, said Captain Voravuth Vongkositkul, director of flight operations of Thai Lion Mentari Co.

Excluding airport tax and other costs, it offers a starting price of Bt400 on the Bangkok-Chiang Mai route for a one-way trip. On international routes, air fares from Bangkok to Kuala Lumpur start at Bt200, while the Bangkok-Jakarta flight starts at Bt1,500.

Currently, the carrier is in the process of applying for inter-national traffic rights and hopes to launch services early next month from Don Mueang to Kuala Lumpur and Jakarta.

These low prices will be offered until next March, when they may be adjusted slightly. What is offered to passengers right now is not a promotional campaign, Lion Air says. In fact, the firm will adopt a year-around pricing strategy, which will be cheaper than other carriers offer.

To strengthen its position, it has spent US$3 million (Bt95 million) on print, outdoor, online and television advertising to promote its service and differentiate itself from rivals, using the tagline “The Freedom to Fly”, with a key message of “consistently low fares”.

The firm will distribute its tickets via various distribution channels such as online, counters in department stores and Skytrain stations, and also travel agents

Some agents were pleased with Thai Lion Air’s arrival on the scene, saying it is another airline option for their incentive tour businesses. However, some said it was not providing enough information for tour agents on its flight schedules and services.

Currently, Thai Lion Air has two aircraft in its fleet, both new 215-seat 737-900ERs. Next year, it hopes to add eight to 10 new aircraft, and its fleet will reach 50 planes within five years.

Next year, new cities will be added to its network. It will launch flights from Bangkok to Hat Yai and from Chiang Mai to Krabi, while regional destinations will include Singapore, southern China, and India.

China is considered the first priority of its network expansion because of big market potential. Thailand is considered its hub to connect other cities in the region, thanks to its strategic location.