New air charter carrier buys first aircraft, to expand into cargo soon

KUALA LUMPUR: Eaglexpress Air Charter Sdn Bhd, a new air charter airline funded by investors from South Korea, the Middle East and Malaysia, bought its first B747-800 aircraft yesterday and will begin operations next month.

While expanding into cargo would be its next strategy, the carrier was not opposed to exploring opportunities to offer scheduled flights, provided it could get Government approvals, said chief executive officer Captain Azlan Zainal Abidin. “It depends on the Government and the direction of the board. “For now, we are keen on air charter and cargo services but if there is a requirement to provide scheduled services in the future, and if there is demand, for sure we will (look at it),'' he said at the airline launch yesterday.

Earlier, company representatives signed an agreement with Penerbangan Malaysia Bhd (PMB) to purchase the B747-800 aircraft. Those in the aviation sector believe that the country can do with another scheduled flight airline. Currently, scheduled services are being offered by Malaysia Airlines and AirAsia while limited services are being offered by Berjaya Air and Firefly.
Asked if there were restrictions to issuing new licences for new players in the air sector, Deputy Minister of Transport Datuk Abdul Rahim Bakri, who was present at the launch, said “no”. On whether the ministry was processing any applications, he said “not that I am aware of”. But Abdul Rahim said that with the opening of the Asean air sector, there would be competition and opportunities and “it would be better to have our own Malaysian companies to participate in the business.''

Competition in the air sector will heighten with the opening up of more routes between Asean cities by 2015 as that will allow any airline to pick up passengers from any of these cities. Abdul Rahim went on to say that “if a small country like Singapore can have four players,'' perhaps “with competition, a lot of opportunities are created'' and players like the airline could participate. Eaglexpress executive chairman Tan Sri Aseh Che Mat said the airline would work closely with Tourism Ministry and had also been invited to explore opportunities in Sabah and Sarawak.

Eaglexpress paid RM18mil for its first aircraft bought from PMB. The carrier plans to buy two more such aircraft by April. Azlan said it would begin its first air charter flight to either Australia or South Africa by February 20. Eaglexpress chief operating officer and chief financial officer Captain Shin Man Soo said the company planned to add eight aircraft costing US$200mil this year and aimed to have 20 aircraft in the next three to five years.

Shin, a South Korean, has a 40% stake in Eaglexpress. The remaining 60% is held in equal blocks of 20% by Azlan, Aseh, and Datuk Wan Ismail Abdul Rahman (executive vice-chairman).
Azlan and Soo are long time friends who mooted the idea two years ago to set up Eaglexpress and later invited Aseh to join them. After its first three aircraft purchases, the airline will acquire freighters for its cargo services. It will focus on South Korea and Hong Kong for the cargo business and its aircraft will operate from there for the cargo operations. On why Eaglexpress opted for the older model of B747 that consumes more fuel than new generation aircraft, Azlan said since the airline was offering charter services, it flights would have full passenger load and the aircraft would be retrofitted with up to 464 seats, making its unit cost per seat lower than scheduled flights.

The airline is finalising a deal to fly 10,000 passengers for umrah to Saudi Arabia from KL International Airport (KLIA) this year. It will also have similar arrangements in Indonesia and Singapore. Eaglexpress is working on a model that will allow it to achieve a revenue of US$100mil in the first year of operations. It expects to break even after the second year.
The carrier will operate from KLIA and will focus on providing hajj, umrah, holiday and humanitarian charter services.
-thestar online.

www.eaglexpressair.com