After months of inactivity, the CEO of Sparrow Air returned to the office and was shocked to see that countless problems developed during the first half of 2016.
The shocking experience â operationally and financially â was the driving force of the CEO and his small team to re-organize, re-shape, and re-size the entire company and the subsidiaries.
Sparrow Air:
Sparrow Air suffered very much due to miss-mangagement, a generally declining market demand and complaining passengers. Thus, Sparrow Air took major steps to improve the situation in the short-term with a dramatic reduction of the offered network. This resulted in a large number of terminated leases for aircraft, mostly Boeing 757s and A318/319s, and the decision to end DC-8-services.
Last but not least, it was the sad duty of the CEO to reduce the workforce by approx. 18.000 employees and this step was taken with immediate effect yesterday. The huge amount of money for this decision results in a huge financial burden for Sparrow Air. However, the prospect of a much more agile and vibrant enterprise largely compensates this short-term loss.
Meanwhile, the entire ops was re-shaped with aircraft allocated to new schedules, reflecting the realistic demand of the markets and the answer by Sparrow Air.
Early estimates show that the systemwide load-factor considerably increased and productivity also went up.
Despite all the adjustments, Sparrow Air remains to be the driving force in Indonesian aviation and the entire team is aware of the investments needed to retain this position.
Important decisions were made, including the signing of an agreement to lease 13 additional Boeing 717s. The Boeing 717-fleet now numbers 142 aircraft, the the largest sub-fleet at Sparrow Air.
The agreements to lease one additional Airbus A321, one additional Boeing 757-300, and three additional MD-81s partly compensate the large reductions made during last week.
Here is our over-view of the Sparrow Air-fleet:
09 Airbus A318
22 Airbus A320
79 Airbus A321
142 Boeing 717-200
42 Boeing 757-200
05 Boeing 757-300
42 Douglas DC-9-10/-20/-30/-40/-50
26 Douglas MD-81
06 Douglas MD-82
09 Douglas MD-83
24 Douglas MD-87
44 Douglas MD-90
The following aircraft are currently stored:
58 Boeing 757-200
18 Douglas MD-83
21 Douglas MD-90
All these aircraft will be re-activated as soon as the general demand for capacity increases.
Nevertheless, the addiction of the CEO for Douglas-aircraft remains to be a tainted love:
https://www.youtube.com/watch?v=pNCHPIErPEI
###
Sparrow Express re-started their business with Dash 8s as well as Fokker F28s and Fokker 100s with the aim to provide essential feeder services. Additionally, BN Islanders and Trislanders were purchased to serve rural areas and/or routes with limited demand but demand for high frequencies. There are plans to lease additional Q400s during this weekend. Sparrow Express is also looking to add additional Fokker 100s on lease. The lack of the possibility to develop a hub at Jayapura and/or Tembagapura largely hinders any improvement for air services in this area of the world with very basic or even non-existent road network and very high dependability on airline services.
###
Trans Domestic Airlines (TDA) re-sized their business with the retirement of the A300 and A320 and with increased flights operated by additional MD-88s as well as two new ARJ21s. There are plans to increase the ARJ21-fleet. At the same time, the decision was made to retire the entire Boeing 717- and MD-90-fleet with the intention to transfer all these aircraft to Sparrow Air. TDA also introduced two Boeing 737-900s to increase capacities on flights from and to Ujung Pandang.
###
Sparrow Asia Airways increased their DC-8-fleet by three aircraft and additional frames will be leased from parent Sparrow Air in the future. The Boeing 747-fleet was reduced to two aircraft while both Boeing 707s were taken out of service.
###
Sparrow Regional Airlines as well as Wings Indonesia both continue to provide their services with no changes. Meanwhile, Sparrow Indonesia was able to increase their Tupolev TU-154M-fleet to six aircraft. The fleet of two TU-134s is in-active at the moment and the technical condition is said to be deteriorating.
###
The complaints by Indonesian media regarding too high market share of air traffic by Sparrow Air was the driving force to establish a subsidiary in Balikpapan and to place aircraft owned by the parent company at our new venture âFairwind Airlinesâ. One Boeing 737-300 and three modern BAC One-Eleven 500s are used to connect Balikpapan with the hubs of Sparrow Air and Fairwind Airlines is a very nice tool to show that competion in the interest of the consumer is a reality.
The economic situation in the areas served by Sparrow Air and her subsidiaries is probably not the best one. However, the current interlining agreements with fellow companies are very fruitful and allows Sparrow Air to offer even better connections through the networks served by IL-partners and vice versa.
Last but not least, Sparrow Air is looking to sell one Boeing 777-300ER for 134.95134.953.927 AS $.
This aircraft was returned after one company folded and the resulting end of leasing-arrangement.
Thank you for taking time to read the news!