AirAsia advances Indonesian plans with Batavia purchase
July 26, 2012AirAsia Berhad (AAB) has announced that through its subsidiary AirAsia Investment it has entered into a Conditional Share Sale Agreement (CSSA) together with its partner Fersindo Nusaperkasa to acquire Metro Batavia, which operates the Indonesian airline, Batavia Air, and Aero Flyer Institute (AFI), an aviation training school.
Owing to Indonesian civil aviation ownership regulations, AAB will hold a 49% stake in Metro Batavia Group with the 51% majority held by Fersindo, which is also the 51% majority shareholder of PT Indonesia AirAsia (IAA). The purchase price for Metro Batavia Group is $80 million and will be settled in cash.
This acquisition will complement IAA which has captured strong market share in Indonesia’s international airline traffic, with an extensive domestic route network throughout the Indonesian archipelago. The Batavia Air acquisition provides greater domestic connectivity and an extensive feeder network into IAA’s existing hubs in Jakarta, Bandung, Denpasar, Medan and Surabaya. Upon the successful acquisition, Batavia Air and IAA will fly more than 14 million customers serving 42 Indonesian and 12 international destinations.
The addition of Batavia Air will provide AirAsia with immediate access to an enlarged fleet of aircraft, experienced pilots and flight crew and increasingly competitive slots at major Indonesian airports at a time when Indonesia’s travel sector is experiencing double-digit growth on the back of rapidly growing consumer demand for air travel. Following the acquisition, the number of distribution channels in Indonesia will increase ten-fold to more than 5,000 authorised agents and more than 70 sales outlets.
“The Batavia Air acquisition is a fantastic opportunity for AirAsia to accelerate our growth plans in one of the most exciting aviation markets in Asia and further underlines our belief in the growth potential of Indonesia’s aviation sector,” said Tony Fernandes, Group CEO and director of AAB.
Bapak Yudiawan Tansari, Batavia Air’s founder, commented, “I am proud to have built Batavia Air into a leading Indonesian airline from its humble beginnings. Recent developments in the airline industry have made me recognise that Batavia Air requires greater scale in order to compete and grow further, and I am so pleased that AirAsia will now take Batavia Air to even greater heights.”
The deal is subject to approval by the Indonesian regulatory authorities.