Air Asia acquires Indonesia's Batavia Air

26 Jul 2012

Air Asia has announced that it has acquired a 76.95 per cent share in Metro Batavia, which owns Indonesian carrier Batavia Air (BTV) and Aero Flyer Institute.

This will be followed by the second phase of purchase involving the remaining 23.05 per cent ownership held by other shareholders, to be completed by the second quarter of 2013 and after US$80 million of investment.

The acquisition will provide Indonesia Air Asia (IAA) with a feeder network that complements the existing operations from its hubs in Jakarta, Bandung, Denpasar, Medan and Surabaya. In total, BTV and IAA will fly over 14 million passengers to 42 Indonesian and 12 international destinations.

Air Asia will have immediate access to BTV’s 33-strong fleet, as well as staff and competitive slots at major Indonesian airports. Distribution channels in Indonesia will also increase ten-fold to over 5000 authorised agents and 70 sales outlets.

Tony Fernandes, group chief executive and director of Air Asia, called the deal a “dream come true” today in a tweet and was quoted in the company’s press release saying: “… the Batavia Air acquisition is a fantastic opportunity for Air Asia to accelerate our growth plans in one of the most exciting aviation markets in Asia.”

Indonesia’s potential for the aviation industry is getting more attention. Ho Hoong Mau, division head, airline distribution of Abacus, a travel solutions and services provider, said in a recent airline conference held by his company that there was tremendous opportunity for the travel industry to ride on Indonesia’s growth and to tap its sizeable domestic market.

According to figures provided by Abacus, total international arrivals in Indonesia grew last year by 9 per cent to 7.7 million international tourists while domestic travellers take 120 million trips per year. Visitor arrivals also grew by 11 per cent to reach 1.9 million in the first quarter this year.

Lion Air, another of Indonesia’s major low cost carrier, has also been expanding aggressively (see story here), again a vote of confidence in the country’s economic prospects.

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Alex Andersson

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