Indonesia’s largest private airline, Lion Air on September 11, 2012 said that it will set up a low cost airline in Malaysia which will take off in the month of May 2013. The new set up of budget airline is a part of its aggressive regional expansion.

The recent move will see Lion Air playing catch up to the region’s top budget carrier Air Asia. Lion Air at present controls nearly half of the air travel market in Indonesia. This also follows Air Asia’s recent acquisition of Batavia Air in a bid to tap Indonesia’s 230 million population.

Lion Air will now own 49% of the new airline, Malindo Airways and the remaining 41% by Malaysia’s National Aerospace and Defence Industries. Rusdi Kirana the Lion Air President said that Malindo Airways will start flying between the two countries with a fleet of 12 new Boeing 737 planes in the month of May before it expands to the other cities in Southeast Asia.

Kirana also said that 12 planes would be added every year to bring a total fleet to more than 100 in a decade. This also includes the adding of Boeing 787 Dreamliner jets by the year 2015 to fly routes in China, Japan and Australia.