Firefly airline plans four new hubs

Airline to operate jets from Kota Kinabalu, Kuching, Penang and Senai

SUBANG: Firefly wants to set up at least four new hubs for its jet operations within the next two years, said its managing director Datuk Eddy Leong. This would not include KL International Airport (KLIA) from where it would begin its jet services from Jan 15 next year. The four new hubs the airline is looking to establish would be in Kota Kinabalu (KK), Kuching, Senai and Penang. They should be easy targets to meet as by then we would have 13 aircraft,'' he told StarBiz.

Datuk Eddy Leong ... ‘They should be easy targets to meet.’

He added that the concept of having hubs was not for fun but to improve aircraft timing and rotation, and services to passengers. We need the spread of timing and aircraft positioning and having more hubs allows us to do that.'' Firefly is turning into a low cost carrier by the middle of next month in a bid to provide the much-needed competition in the low cost air segment of travel in the country. At the moment AirAsia is the clear leader in the low cost market and the only rival domestically is full service carrier Malaysia Airlines (MAS). It is difficult for a full service carrier to compete with a low cost airline as the cost base for both is different. Firefly is a unit of MAS and the entry of Firefly to the low cost arena will surely change the game for low cost travel in the country.

Firefly will use the B737-800 to fly twice daily over the KL-KK and KL-Kuching sectors. Flights will be increased to thrice daily for KL-KK and four times a day for KL-Kuching from Jan 24. The airline would lease six aircraft next year and seven more in 2012 for its operations. The long-term plan is to buy 30 jets, but a decision on the aircraft type has yet to be made even though B737-800 makes business sense given that parent MAS has also ordered 35 of the similar aircraft type, according to Leong. The first of the six lease aircraft for 2011 is due for delivery next week and only with more aircraft can the concept of hubbing be a reality.

Setting up hubs in Kota Kinabalu, Kuching and Penang are considered more viable by analysts than in Senai. To analysts, Senai is deemed too close to Changi, which is a thriving airport, and as such it does not make economic sense for Firefly to set up a hub at Senai. But Leong has a contrarian view. It is not so absurd. From a cost perspective, it is cheaper given the exchange rate (compared to Singapore). It is also a friendlier airport. Besides, we have Iskandar which is a big development and you need connectivity there. If you take all that into account, it (Senai) is an opportunity and if you do not do it, then it is an opportunity that goes away,'' Leong said.

He added that our strategy is not to compete with Changi, but complement it. More so as Changi, as an airport, is not one of the best in terms of low cost as the cost is high to fly into Changi, and it is also congested, so Senai seems quite well positioned.'' Leong said a deal had not been crafted with Senai airport yet as talks were still under way. It is not confirmed as we have not sealed the deal, but are looking at it seriously,'' he said. On when Senai would be added as a hub, Leong said, I would not write off a start in 2011.'' On its ATR (turboprop) operations, the airline has a hub in Subang and Penang and it operates seven ATR 72-500 to several destinations. The move into low cost does not affect its ATR operations.

-thestar online.