By Jamie Freed and Agustinus Beo Da Costa Brothers Chandra
By Jamie Freed and Agustinus Beo Da Costa
Brothers Chandra and Hendry Lie, whose household was concerned in tin mining and the garment trade, and their enterprise companions launched Sriwijaya 17 years in the past with a single airplane that flew from their hometown of Pangkal Pinang on Bangka Island to Indonesia’s capital Jakarta.
Its concentrate on second and third-tier routes gave it a loyal buyer base and helped it snare practically 10% market share behind Lion Air and nationwide provider Garuda Indonesia GIAA.JK.
“They’d an affordable enterprise method,” an trade supply who was not authorised to talk publicly stated of Sriwijaya’s founders.
“They don’t seem to be flamboyant folks like many you see working airways.”
They used a conservative enterprise mannequin of buying older planes on a budget moderately than profiting from low-cost financing to buy giant fleets of latest plane like different fast-growing carriers reminiscent of Lion Air, Malaysia’s AirAsia Group Bhd AIRA.KL and Vietnam’s VietJet Aviation JSC VJC.HM.
The fleet of Sriwijaya and regional offshoot NAM Air is sort of 20 years outdated on common – practically 3 times older than Lion Air group, in response to web site Planespotters.internet.
The airplane concerned within the crash, a 737-500, was one in all solely 77 remaining in service globally, aviation information supplier Cirium stated. Different present operators together with the likes of Nigeria’s Air Peace and Kazakhstan’s SCAT Airways.
Two former Sriwijaya staff informed Reuters there have been strategic causes for holding such an outdated mannequin in service past the cheaper acquisition value.
The smaller seating capability of 120 was extra acceptable for sure routes like Jakarta to Pontianak on Borneo flown by the airplane that crashed on Saturday and the 737-500 may land at airports that have been in any other case served by turboprops as a result of brief runway lengths, they stated on situation of anonymity.
Sriwijaya didn’t reply instantly to a request for remark.
STRATEGY TESTED
The crashed jet’s black packing containers haven’t but been recovered so the reason for the accident stays unclear.
Older jets will be operated simply as safely as newer ones if maintained correctly, although the price of doing so is larger, as are the working prices as a result of they’re much less gas environment friendly.
The standing of its monetary place because the begin of the pandemic is unclear, however a Sriwijaya pilot, talking on situation of anonymity, stated there have been wage cuts and a discount within the variety of planes working through the pandemic in keeping with many different airways globally.
The pilot added the airline had been complying with all coaching and upkeep necessities all through the pandemic.
(Reporting by Jamie Freed and Agustinus Beo Da Costa; further reporting by Tim Hepher in Paris and Bernadette Christina Munthe in Jakarta; Modifying by Miyoung Kim and Michael Perry)
(([email protected];))
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.