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Firefly set to fly high again
Publication Date : 25-01-2013
After having incurred losses due to its short-lived jet operations, Firefly turned the corner last year.
And now, to enhance its position in the marketplace before the Asean skies open for competition, the community airline is set to raise loads and sustain profitability.
Energising its product offering and targeting leisure travellers is a good start towards this end.
Firefly aims to raise average passenger loads by 5 per cent to 75 per cent this year. It plans to carry 1.8 million passengers by year-end and about two million by June, 2014, as compared to the 1.6 million carried in 2012.
Developing a new hub in Johor Baru is also high on its agenda.
The carrier is also on track to add about 10 per cent new capacity to its system this year by taking delivery of two of the 20 new ATR 72-600 it had ordered in December.
“We are profitable. In fact, the turboprops have always been profitable,'' chief executive officer Ignatius Ong told StarBiz in an interview.
However, he would not elaborate on the profit figures for 2012. But prior to deploying jets for its Sarawak and Sabah operations in 2010, the airline was said to have earned about 10 million ringgit (US$3.27 million) in net profit.
The jet operations, however, flew it into the red territory rather quickly.
Ong does not see the airline reviving its jet operations any time soon, as the focus is on the turboprops to drive its point-to-point operations.
The 20 ATRs, costing some 1.7 billion ringgit, will be self-funded, with the first delivery expected in June and the second in October. Several more are expected to land in 2014.
The first delivery will be used to add frequencies, especially to Johor Baru and Penang, while the second is to be hubbed in Johor Baru, where it intends to ply routes such as Sumatra and Northern Java which fall within the two-hour radius category.
Firefly currently flies to domestic and regional destinations in the Asean network, serving more than 25 destinations within Malaysia, Singapore, Thailand and Indonesia. It operates from its base in Subang and has a hub in Penang. A fourth hub is planned for the East Coast.
More daily flights to Penang, Johor Baru and the East Coast areas which Ong felt had “unfulfilled demand'' are in the planning.
The need to energise the product comes after six years of its inception. Ong said the need was there to refresh the airline, be it for its product or branding. Even a change in the crew's uniform is in the offing.
However, he remained mum on the cost of the refreshing exercise.
For now, most of Firefly's passengers were business travellers, and entry into the leisure market was vital as it would give the airline a bigger addressable market, said Ong.
“We have to look at ways to stimulate demand. We need to add frequencies and even one or two destinations, offer more seats on promotional fares, fortify the brand and create excitement as we want more people to fly with us.
“We also need to create awareness among leisure travellers that we fly out of Subang, as many do not know this,'' he noted.
As part of its refreshed image, the airline has made some changes to its website for a better customer booking experience, as most of its sales is done online, also providing connectivity to all devices like tablets and smartphones.
Firefly is a wholly owned subsidiary of Malaysia Airlines (MAS), the latter of which is expected to report a loss for 2012. Analysts, however, expect MAS to turn the corner this year.
Now that Firefly is profitable again, will it eventually be slated for a listing? Ong said: “We would not say never, but not in the next two years. For now, we need to fortify the brand.''
Firefly's edge is that it operates out of Subang, but since it uses turboprop, it can only fly short distances.
However, Ong believes that by providing a seamless experience for its travellers and remaining innovative, there is a huge market for point-to-point traffic that prefers fast and easy connectivity, and Subang serves precisely that need. It is just a matter of reaching out to a wider population.
The airline, according to Ong, also has a very low-cost base “and we are always looking at ways to reduce cost and bring down our turnaround time, which is currently about 20 minutes. And while our fuel consumption is 30 per cent lower than jets, we will set the right fares to ensure our loads grow (though our fares are competitive now).''