Neelam Mathews
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.
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| 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.
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