Airline will cut its fleet of turbo-prop planes to 12 from 18
PETALING JAYA: While Firefly is cutting its fleet size and reducing domestic capacity by 40% as part of a restructuring exercise, its rival Malindo Air is increasing the number of planes from its operations in Subang.
Malindo Air CEO Chandran Rama Muthy said two more ATRs would be added this year to bring the total number of aircraft in operation to 16.
Firefly will cut its fleet of turbo-prop planes to 12 from 18.
Malindo is competing with Firefly which previously has exclusive domestic routes from Subang, according to the Capa Centre of Aviation (Capa).
It has also been able to stimulate demand amid falling yields and low load factors.
Malaysia Airlines Group ordered 20 ATR-600 for Firefly and MAS Wings in 2013 but it has yet to take delivery of eight planes. It will have to decide soon if it wants to take more aircraft deliveries, although Capa believes it could still potentially take them in 2018 and beyond.
On the six Firefly aircraft to be taken out from the fleet this year, Malaysia Airlines group CEO Peter Bellew recently said: “Some of the aircraft will go back to the leasing companies, others will be sold and debts will be repaid. Negotiations are ongoing, and we should have a final answer in the first week of February.”
According to the Capa, nearly all of Firefly’s ATR 72-600s have been parked over the last few months as the airline has surprisingly removed the -600s instead of the older -500s aircraft. The move to cut capacity essentially rolls back three years of growth for Firefly, according to Capa.
Firefly started business in 2007 and has enjoyed a monopoly until 2013 when Malindo entered the scene.
Malindo offers flights on most of Firefly’s routes except Singapore, where it has not been able to secure the rights to fly into the city-state from Subang.
“Subang-Singapore is a profitable route and Firefly has been able to maintain monopoly status in this market due to a restriction at Singapore Changi Airport prohibiting any new turboprop flights. Profits from this exclusive high-frequency Subang-Singapore operation have helped offset some of the losses generated on domestic routes from Subang which have become extremely competitive over the last three years due to Malindo’s expansion,” Capa said.
Malindo accounts for a 59% share of total seat capacity at Subang. It has a stronger 63% share of capacity in the Subang domestic market, where until October 2016, Firefly was the market leader.
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