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Malindo

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MALINDO AIR
As the airlines industry in growing, the low cost airlines provider also are growing as mushrooms as they can see the huge market that are ready to be captured and potential for the big number of profit. People are now more sensitive towards the price since they have many choices. This is the reason for National Aerospace and Defense Industries (NADI) has come with decision to joint venture with Lion Air from Indonesia to commenced Malindo Air into the aviation industry. NADI owned 51% of the share whereby the remaining 49% owned by the Lion Air and they has setup the base in Petaling Jaya, Malaysia.
Malindo Air name has personally introducing the company owned by two respective countries which is Malaysia and Indonesia. They have started their operation officially on May 2013 that are operating at KLIA2 terminal and start with only domestic routes but then expand the routes to international routes to country such as India, Bangladesh, Indonesia, Singapore and many other country. The reason for the Malindo Air is build due to AirAsia entry to the Indonesia market has affected the market share owned by the local Indonesia airlines such as Lion Air hence this has push them also to enter the Malaysia market by performed the joint venture with NADI and provide the low cost airlines carrier wihoch allows the Indonesia to have other choices on the low cost airlines. The chief executive officer (CEO) for Malindo Air is also president director of Lion Air which is Mr Chandran Ramamurthy, being responsible to bring the success for the Malindo Air and keep them to sustain in the airlines industry.

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ENTRY TO INTERNATIONAL MARKET
Malindo Air first started with the domestic routes only focusing on huge market on Kuala Lumpur to Kota Kinabalu routes where more people are looking forwards into the best options for them to fly since flying with Malaysia Airlines is expensive. After three month entering the aviation industry in Malaysia, Malindo Air in August 2013 has come with decision to choose their first international routes which is Dhaka, Bangladesh. They are planning to enter the Indonesia and India market after Dhaka since more demand is seeing which they will focused on the main destinations at those country. Lion Air and NADI has transformed Malindo Air into the successful low cost airlines carrier as their based was set in Kuala Lumpur which is the international transit hub connections and has become the competitor to the AirAsia as they keep adding the international also domestic routes.
Malindo Air now after two years in the industry are proud to announce that they have over 13 domestics routes and over 22 routes international routes and planned to offered another 4 more international routes starting December 2015 which the selection of the international routes is based on the numbers of demands on the routes seeing their competitor especially AirAsia also covering the routes, Malindo Air also trying to fly to uncovered routes especially in Indonesia and India trying to breaks new markets in the aviation industry.

MODES OF ENTRY (JOINT VENTURE)
Joint venture (JV) is an agreement between two parties which the agreement whereby it will created a new entity or assets which will involve some equity. The parties then will share every revenues, expenses and assets equally based on the share owned by them but no specific allocation on the share that can be owned since of them may owned more share than the others. Companies who performed joint ventures normally are pursue four main reasons whereby either they want to enter new market is fastest way, to gain an expertise, increase the production or they would like to expand the business through others network. Joint venture is performed to focused on one projects only and have continuous business relationship to achieve the objectives in the agreed contracts but can also being resolved once they have achieve the goals set. The other party involved in the joint venture could seeking a chances to use either expertise in term of technology, brand names, or contracts on management whereby at the end will benefits both parties. As it involved an equity, both parties are required to manage their financial expenses equally also contribution towards the capital to start the company.
A joint venture between National Aerospace and Defense Industries (NADI) hold 51% of share and Lion Air hold 49% is the only mode of entry used by Malindo Air to enter the market. The contract agreed between these two parties has allows them to carter the market starting with Malaysia markets with their slogan “Smarter Way to Travel”. It does show how they try to compete by providing more convenience experiences to the travellers compared to AirAsia where they providing free wi-fi, free snacks, free luggage up to 30 kg and flight entertainment system make Malindo Air stand on their own as the low cost airlines provider.

MALINDO AIR ACHIEVEMENTS

Malindo Air may be new comers in the aviation industry compared to Malaysia Airlines and Air AirAsia however they have brought their own success to the company, a year after their operations they have won an awards for the Airline of the year in 2014 by the KLIA Awards which is the events that was introduced in year 2006 by the Malaysia Airports Holding Berhad (MAHB) to recognize the achievements of their partners which it will take into consideration on performance regards growth, sales, recognition internationally and services provided. The awards has been presented by the Minister of Transport Malaysia, Dato’ Seri Liow Tiong Lai. Malindo Air CEO, Mr. Chandran Rama Muthy are giving a happy with the award as the awards reflects a vote of confidence from the regional travellers, who acknowledge and appreciate Malindo Air continuous drive for high-quality service. The award has serve as further motivation for Malindo Air and the employees to remain committed and improve further, while it will also mark another milestone as recognition of the sustained long-term development programmed.

MALINDO AIR CHALLENGES & BARRIERS
This part will attempt to clarify quickly on the dangers that will emerge with the presentation of Malindo Air as another set-up aircrafts, there will be a couple test should be through by Malindo Air. With tremendous difficulties confronted via aircraft industry today, for example, including heightening operational expenses and taking off fuel costs. The challenge and barriers are as per below: 1. Market Share
Section of Malindo Air would improve rivalry with other ease bearer that works in Malaysia particularly Air Asia. Prior to the passage of Malindo Air, Malaysia's avionics part is driven by Malaysia Airlines System and Air Asia. Presently the business sector should be share by the three carriers therefore will increment in overabundance limit which could lead the aircrafts having misfortune. By utilizing the slogan "Smarter Way to Travel", Malindo beyond any doubt needs a pack of punch to break the AirAsia imposing business model on the Malaysia market. It is trusted that Malindo Airways is peering toward basically AirAsia's on the lucrative household market in Malaysia which is principally on the east shoreline of the Malaysia that is Sabah and Sarawak. Hypothetically Malindo Airways for being another contestant in Malaysia will go hard and fast for piece of the overall industry to the detriment of benefits by undermining costs. AirAsia additionally then again, might need halt the opposition from the dropping so as to begin charges. This will bring about a full-scale value war.

2. Price of Fuel
Fuel cost is the key driver in aeronautics economy. Its cost continues changing and expanding every once in a while that make it pivotal part to oversee in carrier business. The impact of this fuel unpredictability affects aircraft in Malaysia as well as all carriers on the planet. With the fuel cost continue expanding every once in a while, it will make it harder for another set up carrier, for example, Malindo Airways to pick up benefit. Either increment in fuel value due to characteristic supply surging or theoretical plan, fuel effectiveness is ended up center in aircrafts business. Malindo Air has brought measures to manage the fuel value variance by minimizes the fuel utilization of the air ship by buying flying machine that smolders less fuel which is Boeing 737-900ER.

3. Safety record
A joint venture between NADI and Lion Air to commenced Malindo Air where Lion Air as the administrator of the aircraft in the interim and NADI will be dependable in doing the upkeep for the armada. On the other hand, it is possibly sets aside time for the Malindo Air to pull in the traveler to fly with them because of the awful security record that encompassing the Lion Air which will be its administrator. Lion Air likewise has been banned in the European Union (EU) for inability to agree to wellbeing necessities.

RECOMMENDATIONS
As Malindo Air now has expanding their business and adding on more international routes, the company is still considered new comers in the aviation industry hence there will some aspects that need an improvement in order to help to boost the company success. The recommendation in term of: 1. Expansion of international routes
Malindo Air should expand their international routes to other country especially in Asia country since they have the potential to captured huge market as example Vietnam whereby many people from Malaysia now travel to Vietnam due to business purposed or holiday. The market now has expand to Hanoi and Ho Chi Minch whereby people are looking forward towards the lower ticket fare. If Malindo Air expanding their international routes to Vietnam, they might compete with AirAsia since they are providing free luggage in range between 15kg to 30kg which should be beneficial to the travellers since the travellers visiting Vietnam often back with much more heavier luggage.

2. Rebranding
Malindo Air also are advisable to rebranding their company in order to improved their image worldwide since they are lacking in terms of good image on safety due to Lion Air which is the administrator for the Malindo Air has a bad record in terms of handling guest safety due to incident happen in year 2012 until the Europe country is banned their Airlines. This is important to ensure the smoothness for the Malindo Air to enter a new market and gain the travellers confidence that they were able to provide a good services with high level of security. Malindo Air might loss the existing market also if they did not improved their image as the security is the most important aspects to be considered when choosing the airlines provider beside considering the low price.

3. Aggressive promotion
Promotion is crucial to ensure the high sales number for every company hence the types of promotion used also very important. If the type of promotion is wrongly choose, the company might suffer a loss. An aggressive promotion can able to help Malindo Air to boost their sales, as of now the company is not really promoted their benefit compared to other airlines provider so that the customer know the reason for them to choose Malindo Air.

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