Indonesian Low-Cost market: who will pilot the growing fleet?

The ever-growing competition among low-cost carriers in the Asia Pacific region is one of the main attributes of the regional air transportation industry. The largest share of the market is currently occupied by two main players – AirAsia and Lion Air. While the orders of the former have already turned it into the largest customer of the Airbus A320 Family, the expansion plans of the latter will secure it the status of the world’s largest Boeing 737 NG operator. With the rivalry of the Malaysian and the Indonesian carriers showing no signs of decreasing any time soon, one cannot help but wonder who will pilot the spurring fleets.

In 2013 the Indonesian economics grew by another 5,78%, further supporting the growth of the local middle class as well as the development of local business activity and tourism. This resulted in an approx. 9.5% increase in international traffic, topping almost 13 million of international air passenger in Indonesia that year. However, the domestic air travel still remained the main driving force behind the Indonesian air transportation industry growth, accounting for almost 55.7 million passengers in 2013, according to Statistics Indonesia.

“Without any doubt, Lion Air remains as the leader of the Indonesian market, accounting for almost a half of the domestic market. Though the traffic is growing at a bit slower pace than anticipated by the carrier, the forecast is still quite optimistic,” comments Skaiste Knyzaite, the CEO of AviationCV.com

In order to realize the potential of the growing market, Lion Air Group’s fleet has already reached almost 780 aircraft (including those in order), outrunning its Malaysian competitor whose current and upcoming fleet comprises 650 aircraft. A large number of the ordered aircraft are expected to not only further strengthen Lion Air’s position inside Indonesia, but also support the development of its subsidiaries in Malaysia and Thailand.

’Low-costers are endeavouring to keep their fleet in the air as much as they can. Considering that a single additional Boeing 737 or Airbus A320 requires 4-5 new crews, and with regard to Lion Air‘s plans to deliver at least 20 aircraft each year, the annual demand for new pilots alone spurs to a couple of hundreds. Adding the expansion of other Indonesian players, including AirAsia‘s subsidiaries, the overall demand increases to 600-700 hundred of pilots, ’shares the CEO of AviationCV.com.

In the meantime, the local pilot market doesn‘t have the capacity to meet the demand. Local training organizations prepare less than a third of the required amount, while the shortage of Captains is even more topical.

’The Asia Pacific region is forecasted to witness the birth of several new low-costers, as the competition between the two main players is becoming more and more fierce. Foreign pilots remain as the main source of additional experienced specialists to support the new aircraft and expanding fleets. Recently, AirAsia has shared its plans to become an all-Malaysian pilot carrier thus providing its competitors with extra skilful staff. But ex-AirAsia‘s foreign pilots are only a drop in the sea, and without pilot sourcing from other regions, Indonesian carriers won‘t be able to realize their potential at the extent needed,’ concluded Skaiste Knyzaite.