Oct 15, 2012
AirAsia plans to acquire ailing Indonesian carrier Batavia Air and its Flying School with a $40 million debt and aging fleet announced in July, has been called off.
“This is not the end of the world for Batavia because we will still continue our business without the acquisition,” a senior representative of Batavia Air was quoted saying.
|At singing of MoU in July|
Group CEO AirAsia Tony Fernandes said: “Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with 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.”
“With all that is happening, we are happy and do not want management to be bogged down as an acquisition of this nature can be very time consuming. We felt it is best to spend time doing other things,” Fernandes was quoted saying.
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 established between Batavia Air and AirAsia Indonesia to address an expected skilled pilot shortage in Indonesia.