Author: dioskurn

February 2014 | Dios Kurniawan

When Merpati stopped its operation last week, it confirmed my prediction long time ago; Merpati would NOT survive.

Merpati was born in the era when the government controlled every aspect of every airline; the regulator decided which routes airlines could fly, set their ticket prices, and even regulated what planes airlines could buy (remember in the 80’s only Garuda was allowed to fly jet planes). Merpati, being a government-owned company, was heavily subsidized. If the government thought Merpati needed more money to cover the operational costs to fly thin routes in remote areas, it simply injected fresh money. For many years Merpati saw no competition in the industry as there were no other major airlines operating in Indonesian’s sky other than its big brother Garuda. For Merpati, life was sweet those days.

But that was then, this is now.

A Fokker F28 in Cengkareng, remnant of Merpati awaiting to be scrapped  (photo: Dios K)

Indonesia is the Asia’s most rapidly expanding air travel market, fuelled by Indonesia’s burgeoning economy in the last five years.  The industry growth rate is more than 20% per year, the fastest in the region, and probably in the world. Only six years ago, Indonesian airlines carried less than 30 milllion passengers each year in total. Today, the number quadrupled to 100 million. Soaring demand in domestic air travel brought many airlines in the playground but somehow Merpati failed to take benefit of the opportunity.

So why Merpati did not succeed? This is my analysis:

1. It failed to expand its fleet. It does not operate new generation of fuel-efficient planes. Instead, Merpati continues to rely on a small number of older aircrafts such as classic Boeing 737-300/400s and Twin Otters, most of them are more than 20 years old. As with ageing old cars, they consume more fuel and are becoming more expensive to operate and to maintain. Newer airlines like Lion have been on shopping spree placing largest-ever order of 200+ airplanes, while Merpati has not been able to procure any new plane for decades (with the exception of several China-built MA-60 turboprops which are not in the same league as the American and European counterparts).

2. It failed to develop a workable business plan. Merpati never positioned itself in the marketplace correctly. Historically Merpati served thin routes in isolated areas, flying turboprops in small airports which could not accommodate jetliners. It should have strengthened its position in that particular market, serving regional routes unserved by jet-operating airlines. Instead, Merpati chose to fly on already very competitive trunk routes such as Jakarta-Surabaya and Jakarta-Bali, and did that with legacy, less efficient aircrafts. With multiple airlines serving the same routes, airline tickets are now like a commodity; customers will fly with whoever offers the best service and/or the lowest price. Flying is flying, no matter who is selling.

Airline business is notoriously tough. It is always regarded as high-risk, high-cost and low-margin business. Planes are extremely expensive to buy and to operate; a brand-new Airbus A320 costs up to $80 million (1 trillion Rupiah) a piece, and its maintenance costs can easily reach $1-2 million per year. Operating costs are constantly increasing, fuel prices never go down, and so do pilot salaries. Competition is fierce and yields are low. Many new entrants already paid the price; Adam Air, Jatayu, Mandala and Indonesia Air collapsed several years ago. Batavia Air followed suit last year.

Merpati has tried repeatedly in recent years to restructure its huge debts and has attempted to attract private investment with little success. It does not take a genius to see that the cash-strapped Merpati, with its huge $600 million debt in the shrinking market share, is not in a good position to invite potential investors. It has been in a serious trouble since many years ago. Only today it is becoming pretty clear that the problem is more serious than ever.

As for Merpati, I believe the end is near. There is no way anyone can save it now.

June 2013 | Dios Kurniawan

After quite a long time not flying with Lion Air, last weekend I decided to see if it has improved. The route flown was CGK-DPS, flight number JT024 departing 16:50. Booking was made via Lion’s website four days earlier and payment was easy with BCA internet banking. I found no difficulty in purchasing the ticket.

The Experience
Arriving at the airport Terminal 3, I directly headed down to one of Lion’s check-in counters. The check-in process was pretty quick and efficient, the queue was not long and it took less than ten minutes, but the check-in staff seemed less than hospitable. I received no greetings. Although she worked efficiently, I felt like I was not being treated as a paying customer. Apparenlty Lion Air’s Human Resources Department needs to conduct a training for its front-line staffs about the concept hospitality, or at least teach them how to smile to their customers.

Being a low-cost carrier, I have presumed that punctuality is not something to be expected from Lion. My assumption was correct, the flight was delayed by more than an hour. The boarding time as indicated in the boarding pass should be at 16:20 but only at 17:00 the ground staffs finally made the announcement that the flight would be delayed and take off was scheduled at 17:30. They offered me a refreshment box containing an unappetizing roti coklat and a small water bottle as a compensation for the delay. Because I was hungry and thirsty, I finished the snack almost instantly anyway.

When the boarding call was finally made at 17:40, I proceeded to the gate to found that no jetway was provided. All passengers were required to descend from the gate to the platform/tarmac and to board the plane through air stairs. Not so fun, but I guess all LCCs also do something like this. I entered the plane past the rear door because my seat was numbered 35B, at the back of the plane. Entering the plane, I saw many passengers already inside, busy loading bags to the overhead bin. None of the flight attendants was seen helping. Perhaps that is the company’s policy not to let flight attendants help passengers loading baggages? I don’t know, but it seemed strange that those ladies just stood still watching their customers working hard.

After finding and occupying my seat, I still saw more and more passengers entering the plane. So many passengers, a lot more than what I would normally see in other airlines such as Garuda. A very crowded plane. Lion Air has made it clear why economy class is often referred to as “cattle class”. The aircraft is configured in high-density configuration with more than 200 all-economy seats (a slightly smaller 737-800 usually seats 150). It is pretty obvious that Lion tries to pack as many passengers as possible into this plane. Seats are extremely cramped; at 29-inch seat pitch, this is definitely the most cramped seat I have ever flown with in a commercial flight. Not much legroom. My legs hit the seat in front of me multiple times. And also the seat does not recline much. These seats are no fun at all. Now I understand why the airfare is so cheap.

Leg room is not good, if not bad

The aircraft, a Boeing 737-900ER registration PK-LGZ (delivered in 2010), is relatively new plane with less than 3 years in service, but somehow she had lost her “brand new plane feeling”. The Boeing Signature “Sky Interior” looked nice, but I saw one interior light in the ceiling was malfunctioning – another indication that Lion Air might have not sufficiently maintained this beautiful baby. I wonder how this plane would look like five years from now.

After the boarding was completed, an apology was given by the crew for the delay, mentioning “operational problem” as the reason. Not sure exactly what she meant by “operational problem”, I just assumed – and hoped – that it had nothing to do with any mechanical problem and the engines were still there.

Cengkareng is a very busy airport and due to airport congestion at peak hours (I saw at least 4 other planes lining up in the taxiway), it took us some time before we finally took off from runway 25R. The first 15 minutes of the flight during climb was a pretty bumpy ride. The sky above Jakarta was indeed cloudy that evening. However once the aircraft reached the cruise altitude the remaining of the flight was uneventful and smooth. In this flight, no food was served, no drinks, no in-flight entertainment whatsoever. No video or ceiling TV (A PTV/personal TV is definitely out of question) is installed in this plane. Not even a magazine to read – there was one “Lion Magazine” in the seat pocket belonged to the passenger next to me but I did not bother to borrow it. I guess boredom is something you need to cope with if you choose to fly Lion Air. I ended up turning on my Thinkpad laptop to play some downloaded short videos and to finish some unfinished work.

There were at least 4-5 flight attendants onboard but since no food nor drink was served, they did not seem to have much to do and just stayed in the galleys during most of the 80-minute flight.

It was announced at the beginning of the flight that there would be meals and merchandise on sale, but the flight attendants did not seem to make any effort selling them. The snack cart just passed quickly, not even a menu card was handed over to the passengers to tell us what’s on offer. I saw Lion Air caps and some bottled drinks / sodas in the cart but nothing more. Very little interest was given by the passengers, I believe the flight attendants did not successfully sell anything that evening. Unlike Air Asia which promotes tempting hotmeals and snacks in its flights, Lion does not consider food sales as an additional revenue generator.

B737-900ER engines are pretty quiet and I saw many passengers eventually dozed off during the cruise. Pilots greeted the passengers with good English approximately 20 minutes before landing.

The landing took place flawlessly on runway 09, and the deboarding process was pretty quick (still not using jetways). In the terminal I found no problem claiming my baggage. Apart from the 1-hour delay and the overly cramped seat, overall it was quite a pleasant journey.

The Verdict
Lion Air is a fast-growing Low-cost Carrier in Indonesia, and arguably the biggest airline in Indonesia in term of passengers carried per year. Advertising itself as “We Make People Fly”, it delivers what it promises; flying people and nothing more. Flying with Lion means you must deal with ultra-cramped seats, boredom during the flight, and probably thirst and hunger as well. But for the price I paid, I could not complain. Would I fly Lion Air again? Maybe yes, but only when I am on a short-haul vacation trip. For short flights, the cramped seats might not be a big problem for me.