Lion Air Remains King of Indonesia's Low-Cost Carriers
The Lion Air Group, owned by Rusdi Kirana, remains the dominating force in Indonesia's airline industry. With its three units (Lion Air, Batik Air, and Wings Air) the group carried 20.5 million air passengers in the first half of 2016, controlling 48.4 percent of the market in the first half of 2016, followed by the Garuda Indonesia Group, and the Sriwijaya Air Group. Edward Sirait, President Director of the Lion Air Group, said the group's market share has grown 5 percent over the past year. This is remarkable considering that the global and domestic economy remained somewhat bleak.
Sirait targets to see a further rising market share for the Lion Air Group in the remainder of 2016, hopefully touching a +10 percent growth pace. The group's Lion Air is the king among Indonesia's low-cost carriers. It carried 14.7 million air passengers in the first six months of 2016, followed by other low-cost carriers Citilink Indonesia, Sriwijaya Air, and Indonesia AirAsia.
The positive performance of Lion Air so far this year is remarkable as the company experienced some "turbulence" in 2016, most notably the strike that was staged by Lion Air pilots. In May 2016 about 300 Lion Air pilots went on strike, leaving thousands of air passengers stranded for hours across several Indonesian airports. Pilots conducted the strike over the delayed payment of their travel expenses. On 3 August 2016 the airline fired 14 pilots who were considered to have masterminded the strike.
Obviously, the strike caused widespread outrage among those air passengers who were left stranded at Indonesian airports. On earlier occasions Lion Air had also disappointed air passengers by (unexplained) delays. In fact, Lion Air has one of the weakest scores in terms of departure punctuality.
Departure Punctuality & Air Passengers Indonesian Airlines:
| Airline | Punctuality 2014 |
Punctuality 2015 |
Domestic Air Passengers (H1-2016) |
| Batik Air | 90.78% | 92.12% | 3.46 million |
| NAM Air | 92.92% | 91.80% | 1.11 million |
| Garuda Indonesia | 88.52% | 87.62% | 9.60 million |
| Sriwijaya Air | 83.02% | 84.79% | 3.85 million |
| Indonesia AirAsia Extra | - | 82.40% | 0.49 million |
| Citilink Indonesia | 78.20% | 81.78% | 5.17 million |
| Indonesia AirAsia | 78.67% | 81.11% | 0.68 million |
| Kalstar Aviation | 65.30% | 75.63% | 0.41 million |
| Transnusa | 54.41% | 74.82% | 0.05 million |
| Wings Air | 71.12% | 72.05% | 2.35 million |
| Lion Air | 73.80% | 71.45% | 14.70 million |
| Susi Air | - | 60.97% | 0.19 million |
| Travel Express | 86.30% | 57.40% | 0.22 million |
| Trigana Air | 62.91% | 56.12% | 0.23 million |
Source: Bisnis Indonesia
Lion Air offers 44 domestic routes and four international routes to consumers, with an average of 520 flights per day in total. Indonesia is an archipelago that consists of thousands of islands and therefore low-cost airlines are a great choice for transportation. Competition between the nation's budget carriers causes competitive prices. Air passenger traffic in the Asia-Pacific has grown rapidly over the past decade. This region is in fact the world's fastest growing air travel market due to the big populations and rising purchasing power.
Air Passengers in Indonesia:
| Jan-July 2016 |
Growth Y/Y |
|
| Air Passengers Indonesia |
53.9 | +15.6% |
| - Domestic (in millions) |
45.6 | +17.6% |
| - International (in millions) |
8.4 | +5.7% |
Source: Statistics Indonesia (BPS)
Air Passengers in Indonesia:
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Air Passengers (in millions) |
62.4 | 66.4 | 68.7 | 72.6 | 82.4 |
Source: Ministry of Transportation