Published on Business Times:
- AirAsia, Lion Air chiefs play down rivalry
KUALA LUMPUR: AirAsia boss Tan Sri Tony Fernandes questioned his rival's growth plans after Lion Air struck a US$24 billion (RM75 billion) Airbus order while pledging to preserve his own ties with the European jetmaker.
As competition intensifies between Southeast Asia's largest budget carriers, Lion Air co-founder Rusdi Kirana shot back by targeting sharp growth in AirAsia's domestic Malaysian market.
In a realignment of industry loyalties, Indonesia's Lion Air loosened exclusive ties with Boeing this week to place a 234-plane order with Airbus, which is also sole supplier to AirAsia.
Asked if he was upset about the blockbuster deal between his top supplier and his closest rival, Fernandes said, "Why should I be? I think Lion has probably bitten off more than it can chew. We are focused on ourselves".
Lion Air co-founder Rusdi mocked any suggestion that the airline had over-extended itself.
"Is he an angel? Does he know the future?" Rusdi said when asked about Fernandes's comments.
The two airline chiefs discussed the deal in separate interviews.
Lion Air launched its services in Malaysia yesterday through a partially owned venture, Malindo Air, while AirAsia says it is filling planes successfully in Indonesia.
Rusdi said Malindo hopes to operate 100 Boeing aircraft within 10 years.
The rapid rise of both airline groups has been channelled through exclusive partnerships with jetmakers Airbus and Boeing - making the two airline bosses star players in a broader power struggle in the US$100 billion jet industry.
Those battle lines were abruptly redrawn when Lion Air announced the Airbus order in Paris on Monday, doubling up on a similar order placed with Boeing just over a year ago.
AirAsia has taken delivery of more than 100 Airbus A320 aircraft out of a total of 475 it has ordered.
Airlines can save money by running one type of fleet but can also obtain good pricing by forcing suppliers to compete.
Fernandes, who bought AirAsia together with its fleet of two Boeing 737s in 2001 and then built it into the largest operator of Airbus A320s, pledged to stick with the European planemaker.
Asked whether he might consider Boeing for future orders, he reiterated he wanted to stick with one type of aircraft. The Malaysian entrepreneur studied new jets from Canada's Bombardier before striking his most recent Airbus deal, however.
"I run a proper business not an emotional business," Fernandes said in an electronic interview.
"They have to sell planes. How can I stop them?" he said of Airbus's three-year courtship of Lion Air.
Low-cost airlines prefer operating one type of aircraft to reduce the cost of parts and separate crews. But the sheer size of some of the world's largest fleets has raised questions over whether one supplier can meet the needs of the largest airlines.
Air Berlin and Norwegian Air have a mixed portfolio of jets.
Bankers and lessors have expressed concerns that a series of record-breaking orders risks flooding Southeast Asia with too many narrowbody planes, despite projections of sharp growth.
"The world is big. There is a lot of space for everybody. We should accept that competition is normal," Rusdi said.
Asia is expected to double its fleet in the next 20 years. Reuters
It was just on Thursday that Tony Fernandes said ‘Asia can take a LOT of planes.’
- “There are 3 billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia,” Fernandes said in a Bloomberg Television interview at the Credit Suisse Asian Investment conference in Hong Kong yesterday. “So it can take a lot of planes.”
I have always questioned about Business Times's choice of article titles.
Here's the screen shot of today's Business Times article.
For some strange reason, I decided to read Reuters article too. Dunno why. :P
As you can see the article is the same!!!!
Only difference is the title!!!
The original title from Reuters is "AirAsia, Lion Air bosses spar over plane orders".
Business Times however decided the title should be "AirAsia, Lion Air chiefs play down rivalry".
Don't you wonder why Business Times always have to be so creative with its article titles?