AIRASIA and its Indonesian partner, Fersindo Nusaperkasa, have dropped their plans to acquire Metro Batavia Group (TTG Asia e-Daily, July 26, 2012), which operates Indonesian carrier, Batavia Air.
“The precise scale of integration, including a re-fleeting exercise, as well as streamlining an amalgamation of cultures is expected to take up considerable time and effort, joint resources which can be more efficiently utilised in a targeted manner,” AirAsia explained in a statement.
Instead, “the proposed tie-up between the parties has been reorganised as a multilateral, multi-phase collaboration agreement encompassing groundhandling, distribution and inventory systems”.
In addition, Batavia Air and AirAsia Indonesia will jointly establish a separate aviation training facility with classroom, fixed-wing and simulation training capabilities.
AirAsia group CEO, Tony Fernandes, said: “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. We always knew it was not going to be an easy transaction.”
He added: “It has been a 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 (TTG Asia e-Daily, October 12, 2012).”
Fersindo shareholder, Muhamad Riza Chalid, said: “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.”
Dharmadi, CEO, AirAsia Indonesia, said the airline would accelerate its fleet expansion starting from 2013, upgrade its sales and distribution system, and provide differentiated services while implementing dynamic pricing strategies.
“We are looking to more than triple our fleet size in the next five years to accommodate an average annual passenger growth rate of 24 per cent and 28 per cent in international and domestic markets respectively. We will continue to strengthen our network by adding more hubs and developing our services to Eastern Indonesia,” he said.
