World Indonesia’s Sriwijaya Air built its empire on old, cheap planes

11:55  12 january  2021
11:55  12 january  2021 Source:   aljazeera.com

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Rescue teams in Indonesia resumed their search for the Boeing Co. jet carrying 62 people after uncovering debris that are “strongly suspected” to be part of Sriwijaya Air Flight SJ182, which has been missing since Saturday afternoon. Emergency signals transmitted by two devices have been

The Sriwijaya Air Boeing 737-500 lost contact shortly after takeoff on Saturday from Jakarta with 62 people on board. It was heading for The plane that crashed on Saturday was nearly 27-years- old and did not use the new, problematic MCAS systems built into the current-generation 737 Max planes .

Starting with just one plane in 2003, Indonesia’s Sriwijaya Air has become the country’s third-largest airline group, aided by its strategy of acquiring old planes at cheap prices and serving routes neglected by competitors.

a pile of snow: The search continues for the two black box recorders of the Sriwijaya plane that crashed on Saturday, shortly after taking off from Jakarta [File: Dimas Ardian/Bloomberg] © The search continues for the two black box recorders of the Sriwijaya plane that crashed on Saturday... The search continues for the two black box recorders of the Sriwijaya plane that crashed on Saturday, shortly after taking off from Jakarta [File: Dimas Ardian/Bloomberg]

The mid-market airline, which has few international flights, was thrust into the spotlight this week when a nearly 27-year old Boeing Co 737-500 crashed into the Java Sea on Saturday with 62 people on board.

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The Sriwijaya Air disappeared from radars four minutes into its journey to Pontianak in West Sriwijaya Air , founded in 2003, is a local budget airline which flies to Indonesian and other Old aircraft, but many still flying. The aircraft which appears to have been lost off Indonesia was a Boeing

The plane of Indonesia ’ s Sriwijaya Air that crashed earlier on Saturday near Jakarta had sent no emergency signals, Bambang Suryo Aji, the deputy head for operations and preparedness of the Indonesian Search and Rescue Agency (Basarnas), said. "We need to cross-check to determine why

Brothers Chandra and Hendry Lie, whose family was involved in tin mining and the garment industry, and their business partners launched Sriwijaya 17 years ago with a single plane that flew from their hometown of Pangkal Pinang on Bangka Island to Indonesia’s capital Jakarta.

Its focus on second and third-tier routes gave it a loyal customer base and helped it snare nearly 10 percent market share behind Lion Air and national carrier Garuda Indonesia.

“They had a reasonable business approach,” an industry source who was not authorised to speak publicly told the Reuters news agency of Sriwijaya’s founders.

“They are not flamboyant people like many you see running airlines.”

They used a conservative business model of acquiring older planes on the cheap rather than taking advantage of low-cost financing to buy large fleets of modern aircraft like other fast-growing carriers such as Lion Air, Malaysia’s AirAsia Group Bhd and Vietnam’s VietJet Aviation JSC.

Indonesian Sriwijaya Air Flight SJ182, a Boeing Plane, Goes Missing Shortly After Takeoff

  Indonesian Sriwijaya Air Flight SJ182, a Boeing Plane, Goes Missing Shortly After Takeoff The flight disappeared from radars just after takeoff from Jakarta and was carrying over 50 passengers, according to Indonesian media reports.The plane plunged 10,000 feet in less than a minute as it flew over the Java Sea, minutes after take-off from Soekarno–Hatta International Airport, according to tracking website Flight24, which followed its flight path to just off the coast north of the capital.

Sriwijaya Air , which operated Flight 184, began operations in 2003. Since 2008, the airline has been involved in four major accidents, all involving aircraft departing the runway on landing, all resulting in damage to the aircraft beyond repair, and one accident involving a fatality.

The Sriwijaya Air plane which crashed into the sea on Saturday had passed an airworthiness inspection last month, officials have said. The cause of the crash remains unknown. On Monday, Indonesian police identified its first victim - Okky Bisma, a 29-year- old flight attendant on the plane .

The fleet of Sriwijaya and regional offshoot NAM Air is nearly 20 years old on average – nearly three times older than Lion Air group, according to website Planespotters.net.

The plane involved in the crash, a 737-500, was one of only 77 remaining in service globally, aviation data provider Cirium said. Other current operators including the likes of Nigeria’s Air Peace and Kazakhstan’s SCAT Airlines.

Two former Sriwijaya employees told Reuters there were strategic reasons for keeping such an old model in service beyond the cheaper acquisition cost.

The smaller seating capacity of 120 was more appropriate for certain routes like Jakarta to Pontianak on Borneo flown by the plane that crashed on Saturday and the 737-500 could land at airports that were otherwise served by turboprops due to short runway lengths, they said on condition of anonymity.

Sriwijaya did not respond immediately to a request by Reuters for comment.

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Pontianak, Indonesia (CNN) Indonesia ' s National Search and Rescue Agency team was continuing a search operation for the 62 people aboard Sriwijaya Air Flight 182, which crashed into the ocean shortly after takeoff Saturday. The Boeing 737-500 plane was heading from Jakarta to the city of

But Sriwijaya Air , which is Indonesia ’ s third-largest carrier and began operations in 2003, had never suffered a fatal crash involving those aboard its Indonesian aviation analysts said that this crash could imperil Sriwijaya Air ’s viability, especially as the coronavirus has emptied Indonesian skies of

Strategy tested

The crashed jet’s black boxes have not yet been recovered so the cause of the accident remains unclear.

Older jets can be operated just as safely as newer ones if maintained properly, though the cost of doing so is higher, as are the operating costs because they are less fuel efficient.

Rising upkeep costs and low fare prices due to heated competition meant that by 2018 Sriwijaya had accrued large debts owed to Garuda’s maintenance arm, GMF AeroAsia.

As of September 30, 2020, Sriwijaya and NAM owed around $63m in unpaid bills to GMF AeroAsia and Garuda had warned of impairment losses on $37.5m owed by Sriwijaya as part of a failed cooperation agreement, according to GMF AeroAsia and Garuda.

The status of its financial position since the start of the pandemic is unclear, but a Sriwijaya pilot, speaking on condition of anonymity, said there were salary cuts and a reduction in the number of planes operating during the pandemic in line with many other airlines globally.

The pilot added the airline had been complying with all training and maintenance requirements throughout the pandemic.

Indonesia’s transport ministry said in a statement on Tuesday that the plane, which had been grounded between March and December last year during the pandemic, passed an airworthiness inspection on December 14.

Indonesia, with a population of about 270 million people spread over thousands of islands, is the world’s fifth-biggest aviation market in terms of scheduled capacity, according to OAG Aviation Worldwide. The coronavirus pandemic has squeezed the country’s airlines, as it has with others around the world, and domestic seat capacity is still 32 percent below pre-COVID levels, OAG said.

Sriwijaya and NAM together have 34 planes for operations and half of them are in service, according to Planespotters.net.

“The question now is whether Sriwijaya, already in poor financial health, is able to overcome this accident as COVID-19 has crippled all airlines,” said Shukor Yusof, head of Malaysian aviation consultancy Endau Analytics.

Volcano spews ash above Indonesia's Java island .
Mount Semeru has erupted, spewing volcanic matter miles into the air and placing locals on alert.No evacuation orders have so far been issued, and no casualties reported.

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