SERI KEMBANGAN (Sept 11) : Indonesia’s largest privately run airline group PT Lion Group is setting up a new airline in Malaysia through a joint venture agreement with National Aerospace & Defence Industries Sdn Bhd (NADI).

The new airline which will be called Malindo Airways will be based in KLIA2 and will be a Malaysia registered airline.

According to Lion Group’s president director Rusdy Kirana, the airline will serve flyers which are still cost conscious but at the same time demand for quality and comfortability of an aviation transportation.

"We all know that Malaysia has already two major airlines namely AirAsia Bhd which serves the liw cost segment, and Malaysia Airlines as a full service carrier. As a new comer to the Malaysian aviation industry, we will not compete directly against these two more established airlines.

"So Malindo will serve the middle between a low cost model and a full service model. Our pricing will be as competitive as AirAsia but all our flights will be equipped with in flight entertainment system, WiFi, and passengers can make calls and receive calls when on board," said Rusdy at a media briefing before the signing ceremony of the joint venture agreement with NADI at the Palace of the Golden Horses here Tuesday.

In the joint venture company, NADI will own 51% while Lion Group will have the rest of the shares.

The companies plan to have it fly by May 2013 once the KLIA2 is completed, Malindo will have a fleet of 12 aircrafts which consist of Lion Group’s Boeing 737-900 ER.

"We will connect Kuala Lumpur to a lot of Indonesian cities such as Jakarta, Medan, Bali, Palembang, Balikpapan and others. Indonesian passengers going to Malaysia will use Kuala Lumpur as the destination before going to other Asian destinations such as Manila, Bangkok, Hanoi, Guangzhou, Shenzhen and Xiamen," he added.

Declining to disclose the amount of capital investment that Lion Group has to inject into Malindo, Rusdy said the group will provide all the money needed for the airline to grow. Targeting to grow the airline by 12 more aircrafts per year, Rusdi targets the airline to have about 100 aircrafts in 10 years time.

NADI’s president Tan Sri Ahmad bin Johan said the joint venture between Lion Air and the group will provide more choices for passengers in Malaysia to go to Indonesia and other Asian cities. The vast number of aircrafts under the Lion Group will also provide maintenance, repairs and overhaul jobs to NADI’s companies and position Malaysia as the hub for MRO services in South East Asia, said Ahmad.

"The agreements signed today will not only help us expand our service offerings, but it provides us the necessary platform and resources to develop human capital that is necessary to fuel the industry in Malaysia, as well as through the region. The joint venture will benefit more than just two companies. This strategic partnership will benefit Malaysia and Indonesia, where these two companies are based, as well as the entire region that they will service," said Ahmad.

Rusdi said the new airline will offer fares as low as the other existing low cost airlines but will provide more additional services to passengers.