KUALA LUMPUR: SMTrack Bhd, which provides radio frequency identification (RFID) solutions, is venturing into the low-cost airline business.
Yesterday, it signed a memorandum of understanding with Dexma Express Sdn Bhd, the official general sales agent of Garuda Indonesia's subsidiary Citilink, for potential investment in the upcoming Citilink Malaysia operation.
SMTrack is buying a 60 per cent stake in Citilink Malaysia for RM3.5 million.
Dexma would change its name to Citilink Aviation Malaysia Sdn Bhd and obtain air operator certificate and other licences or permits required, a representative from SMTrack, Jay Hoo Ying Wah, told reporters after the signing ceremony.
The share sales agreement is expected to be concluded in three months.
Hoo said Citilink Aviation is expected to start operation in the second quarter of 2019, providing low-cost flights especially to customers flying within Asean.
“Our first route will be from Kuala Lumpur to Phnom Penh, Cambodia. Outside the ASEAN countries, we will soon target China,” Hoo added.
Dexma director Alvin Heng Jee Zhi, said passengers flying with the airline would enjoy free 10kg baggage allowance and meals.
“We are not only competing in providing affordable flight tickets but also better service. We are going to be a new player in Malaysia but we are experienced in the Indonesian market,” he said.
Jakarta-based Citilink was established in 2001 as a low-cost brand of Garuda Indonesia, set up to operate shuttle services between Indonesian cities.
Since July 30, 2012, Citilink has officially operated as a separate subsidiary of the Indonesian national carrier.
Citilink's fleet size currently stands at just over 50 aircraft.
SMTrack, listed on Bursa Malaysia's ACE Market, provides online track and trace solutions and platforms using RFID. Its tagging solutions ensure traceability in the logistics and supply chain as well as food processing, among others.
The group narrowed its net loss to RM3.87 million on revenue of RM1.51 million for the financial year ended July 31, 2018, compared with a loss of RM7.38 million in the preceding year.