AirAsia Realigns Proposed Acquisition Plans in Indonesia

AirAsia Berhad has confirmed a strategic realignment to the Conditional Share Sale Agreement it had entered into on 26 July 2012, together with its partner PT Fersindo Nusaperkasa to acquire PT Metro Batavia which operates the Indonesian airline, Batavia Air and Aero Flyer Institute, an aviation training school.

The proposed tie-up between the parties has been reorganized as a multilateral, multi-phase collaboration agreement encompassing ground handling, distribution and inventory systems. A separate aviation training joint venture with classroom, fixed-wing and simulation training facilities will be immediately established between Batavia Air and PT. AirAsia Indonesia to address an expected skilled pilot shortage in Indonesia.

Group CEO Tony Fernandes said, “We always knew it was not going to be an easy transaction. It has been a very good experience and we come out of it feeling more confident of what we need to do to grow the market in Indonesia. Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with Batavia Air. The company’s decision was based on a thorough evaluation by many parties into Batavia Air. In our minds, the timing was perhaps not appropriate as it would have induced too many risks and would ultimately be earnings dilutive to our shareholders.”

Fersindo shareholder Muhamad Riza Chalid added, “As an Indonesian company our interest was to find the best solution for all parties, including the Indonesian consumer. The acquisition at this time would not have achieved these objectives. We continue to be fully supportive of AirAsia’s growth in Indonesia.”

Dharmadi, CEO of AirAsia Indonesia said the airline will accelerate its fleet expansion starting from 2013 onwards. “We are looking to more than triple our fleet size in the next 5 years to accommodate an average annual passenger growth rate of 24% and 28% in international and domestic markets respectively. We will continue to strengthen our network by adding more hubs and developing our services to Eastern Indonesia.”

Both airlines will continue to operate as normal.

See other recent news regarding: Travel News Asia, RevPAR, Interviews, Pictures, Sports Tourism, Videos, AirAsia, Tune Hotels, AirAsia X, Batavia, Indonesia