President Director of Lion Group, Rusdi Kirana poses on the aisle of a new Airbus A320 of Indonesia’s premier service Batik Air while on inaugural flight from Jakarta to Batam city on November 21, 2014 in Batam city aiport in Riau province, western Indonesia, during a ceremony marking the arrival of the first batch of Airbus A320. The biggest private Indonesian airline company, Lion Group which operates Batik Air has purchased a total of 234 Airbus A320 aircraft to boost its growing operation in Indonesia and in Southeast Asia.
In a rundown tower block in a part of Jakarta better known for seedy nightclubs than corporate headquarters, is the office of one of Indonesia’s most influential and unpredictable billionaires. From his top-floor suite, Rusdi Kirana runs Lion Air, the Indonesian budget carrier that rivals AirAsia, the region’s biggest low-cost airline.
Mr Kirana bursts in, cigarette in hand, wearing jeans, an untucked shirt and loafers with no socks. “This is my new business card,” he says with a big grin. He is referring to his appointment in January as an economic adviser to Joko Widodo, the Indonesian president who was elected last year. “Now I can meet the president and ministers and hear a lot of secrets,” he jokes.
His boyish enthusiasm for the part-time position points to his status as an outsider, in more senses than one. Most members of Indonesia’s powerful business and political elite were helped by dint of their birth, whether their fathers were tycoons, officials or military men.
In business, 52-year-old Mr Kirana rose from humble beginnings. Once a wandering salesman for Brother typewriters, he went on to build one of the world’s fastest-growing airlines.
Last year, he became one of a handful of Indonesia’s ethnic Chinese minority who have jumped into frontline politics. Mr Kirana, one of the 13 per cent of Indonesians who are non-Muslim, did so in typically bewildering fashion, joining an Islamic group — the National Awakening party — as deputy chairman. “Because I’m rich, I could join any party and people were shocked that, as a Chinese Christian, I joined an Islamic party,” he says. “I want to show to my country that we as a minority can’t just demand that we are accepted. We have to accept the majority.”
Mr Kirana’s entry into politics was controversial. When Mr Widodo appointed him to his advisory council, he said he would resign as day-to-day chief executive of Lion Air to reduce the potential for conflicts of interest. But stepping away from a business he dominates has been hard.
As so often, Mr Kirana makes a gag about his predicament, pointing out that many in notoriously corrupt Indonesia go into politics to make money.
“I’m not looking for money in politics so I still need to run my company,” he says, smiling through his improbably bushy, black moustache.
Over a simple lunch of fried chicken, fish and steamed rice in his office, Mr Kirana lays out the unlikely story of how he built Lion Air and the challenges he faces to keep it growing, amid an economic slowdown and persistent concerns about its safety record.
A braggart at times, at others he is down to earth, rejecting the fawning entourage kept by many Asian tycoons.
“Initially, I worked as a salesman in Jakarta for a Brother distributor, earning $4-$5 a month,” he says as he serves sweet and sour soup. “It was very tough as some people would make you wait for two hours and then they wouldn’t buy.”
After typewriters, he sold German baking ingredients. “I can still make croissants, Black Forest gateaux and cookies,” he says, miming rolling dough. “It’s very hard to make the croissants crispy but kue lapis [layer cake] is even more difficult. Still, not as hard as running an airline.”
Next, he built a travel agency with his brother and in 2000 they launched Lion with $900,000 and a leased Boeing 737, at a time when Indonesia was still reeling from the Asian financial crisis. But the economy started to recover from 2003 and then gathered momentum. Demand for air travel surged in the world’s largest archipelago nation, with 255m people and thousands of inhabited islands.
Operating on a low-cost model, he rapidly won market share from Garuda Indonesia, the state-owned flag carrier. Lion leapt to international prominence in 2011, when it signed the biggest single order in Boeing’s history. A record order with Airbus followed in 2013, as Mr Kirana expanded into Thailand and Malaysia and launched a full-service carrier called Batik Air. The group now operates about 200 aircraft and has another 500 or so on order. It flies about 40m people a year and controls nearly half the domestic aviation market.
AirAsia, led by Malaysian Tony Fernandes, flew more passengers last year, but has been forced to slow its expansion because of financial problems. That Lion Air remains privately held — Mr Kirana and his family own 100 per cent — allows him to change tack easily, in contrast to Malaysia-listed AirAsia, which has suffered a big sell-off of its shares and a dispute with an equity research house.
For years, Mr Kirana has teased analysts about an initial public offering but Brendan Sobie of the Centre for Aviation in Singapore says Lion Air is not ready.
“He’s very shrewd but one of the biggest weaknesses of Lion is the lack of expertise and depth after Rusdi,” says Mr Sobie. “They need more senior people given the size of the group.”
Mr Kirana insists there are advantages to not being listed. “I’d like to keep the company private,” he says, lighting another cigarette. “I can increase my staff’s salaries or fire them in one minute and I can buy an airport without board approval.”
On the latter point at least, he is not joking. With Jakarta’s decrepit Soekarno-Hatta airport operating way over capacity, he has acquired 5,500 hectares of land outside the capital city to build his own airport. He claims it can be done within five years despite Indonesia’s poor record on infrastructure projects, opposition from existing airports and the lack of all-important government permits.
“The market is huge in Indonesia but we don’t have enough airport capacity,” he says. “We will face some delays from the bureaucracy but I’m quite optimistic the president will get involved if we have problems getting licences. That’s why I bought the land.”
His ebullience belies the difficulties he has faced during the past 15 years in one of the world’s toughest industries.
Lion has had one fatal accident and it is one of several Indonesian carriers banned from flying into the EU because of safety concerns. It has had many scrapes and near misses, including a miraculous incident in 2013 when a new Boeing 737 crashed into the sea while trying to land on the resort island of Bali. All on board escaped alive.
Mr Kirana says Lion has worked with Boeing and Airbus to improve its safety standards but he also deflects blame.
“Accidents are very complex, involving humans, weather, maintenance and ground handling,” he says.
Some have asked how a man from such modest beginnings could create such a big business, claiming, without providing any evidence, that he may be a front for other investors.
He dismisses such talk with a hearty laugh and final quip. “When you’re growing very fast, people don’t believe in the process. But as I told parliamentarians when I was asked: I can’t launder my own shirts so how can I launder money?”