Firefly Airlines (FA) will start flying jet planes in the first quarter of next year, in a signed FA is shifting its focus as the core brand Malaysia Airlines struggles to survive. FA, which is trying to negotiate steep discounts from lessors to keep national carrier Malaysia Airlines afloat, said Firefly would add up to 10 narrow-body jets to its fleet in phases, serving the domestic, ASEAN, and Asia Pacific markets out of Penang International Airport. Firefly currently flies turboprop planes out of Subang Skypark.

Firefly will be complementing sister company, Malaysian Airlines (MA), in serving the leisure market while diversifying its base connecting secondary cities in Malaysia to East Malaysia, Thailand, Indonesia and Singapore, FA said. It will leverage on available resources and talents in the group, with the possibility of deploying Boeing 737-800 aircraft from MA, allowing MA to focus on the premium market.

Setting up Fireflys jet operations at the Penang hub will require minimal investment by FA next year, with an expected increase in capacity, measured as average seat per kilometer, of 36 per cent over the next five years, FA said. FA would inject funds to start new jet operations, focusing first on domestic services. Firefly would obtain narrow body planes and subsequently wide-body aircraft from the market, Reuters reported.

FA Chief Executive Officer Captain Izham Ismail said the plan for Firefly was in line with a group-wide business strategy that has been realigned to suit the current and future environment following the COVID-19 pandemic. Based on available forecasts, domestic and short haul travel will be most preferred in the current environment, hence it makes commercial sense for Firefly to supply this demand but from the northern region, he said.

(Adopted and modified from Channel News Asia)

Required:

Q1. Based on the case above, discuss what capacity strategies that FA had used in this new business environment.