AirAsia to Buy Control of Batavia Air

[JuliusWong 0]

Fresh from Indonesia Aviation scene, Batavia Air is rumoured to be in financial crisis. With two A320s and 1 B737 repossessed over past one month, Batavia Air has been cancelling flights and delaying flights up to 4-5 hours. Both A330s are also being prepared for repossession.

 

Not sure if the news is true, have a read here at this blog: http://gerryairways.blogspot.com.au/2012/05/batavia-air-in-trouble.html and http://gerryairways.blogspot.com.au/2012/06/batavia-air-in-trouble-part-2.html

 

Contrary to the blog post, Batavia Air did managed to win tender to do Haj flight: http://www.thejakartaglobe.com/corporatenews/batavia-air-gets-nod-for-hajj-flights/512402

 

Batavia Air also recorded several unhappy incidents of late, including one runway excursion: http://www.tempo.co/read/news/2012/05/19/058404768/Kisah-Rasmidi-Menyelamatkan-Batavia-Air, http://gerryairways.blogspot.com/2012/04/update-batavia-a320-overrun-at-bpn.html

 

Apart from sketchy information from the blog, we may need official confirmation from the airlines itself.

[Peter Smith 1]

The author of "Gerry Airways" is very well respected and is often a spokesmen for the local media regarding aviation. He has also a valuable contributor to an episode of Air Crash Investigation. Nothing in Indo aviation gets past him!

[flee 5]

Saw 2 of their B737s at outside Airod hangars at SZB/WMSA the other day. Today only one is left outside.

[KC Sim 2]

Two A320s - devoid of Batavia titles but still wearing the old and current basic Batavia liveries - are parked at Changi Airport's North Apron. The have been there for some weeks already ... but Batavia's flights to Singapore are still being operated.

[JuliusWong 0]

The author of "Gerry Airways" is very well respected and is often a spokesmen for the local media regarding aviation. He has also a valuable contributor to an episode of Air Crash Investigation. Nothing in Indo aviation gets past him!

Thanks Peter for the info. His blog is a good read. Have been reading it for past two days. Loads of interesting happenings.

 

Saw 2 of their B737s at outside Airod hangars at SZB/WMSA the other day. Today only one is left outside.

I think they are taking in more B737s, a reverse from their move towards A320 family initiated few years back.

 

Two A320s - devoid of Batavia titles but still wearing the old and current basic Batavia liveries - are parked at Changi Airport's North Apron. The have been there for some weeks already ... but Batavia's flights to Singapore are still being operated.

Thanks for your info, KC Sim. Most probably they were sent to Seletar Airport for re-configuration to be return to lessor.

[reezal 0]

Didn't see this coming but this news is quite interesting...

 

AirAsia to Buy Control of Batavia

 

AirAsia, the region’s biggest budget carrier, is set to buy control of Indonesia’s Batavia Air as it moves to boost its business in the country, which has the largest population in Southeast Asia.

 

Audrey Progastama Petriny, the communication manager of Malaysia-based AirAsia, said AirAsia and Batavia Air would sign the acquisition deal in Jakarta today.

 

“This is serious. Friends in media are all invited to cover the signing of the agreement,” she said in a text message.

 

The signing is scheduled to take place on the eighth floor of the Ritz-Carlton Jakarta, Pacific Place, Audrey said without providing any further details, including the value of the deal.

 

Dharmadi, the president director of Indonesia AirAsia, will announce the details of the deal today, Audrey said.

 

Yudiawan Tansari, the owner of Batavia Air, confirmed that AirAsia was buying control of his airline.

 

“This is a purely business to business transaction,” he said in a text message.

 

Yudiawan, though, said the acquisition would go through several steps. “The first step will the signing,” he said, declining to elaborate on the other steps.

 

Batavia Air currently has 33 aircraft in its fleet, consisting of 15 Boeing B737-300s, nine Boeing B737-400s, one Boeing B737-500s, one Airbus A321, five Airbus A320s and two Airbus 330s. Batavia Air owns 18 of the planes, while the remainder are leased by the carrier.

 

AirAsia has grown rapidly since former record industry executive Tony Fernandes bought the failing airline in 2001.

 

 

SOURCE: http://www.thejakart...-batavia/532660

[Sandeep G 1]

Bit of consolodation in the Indonesian industry one would suppose. First Tiger-Mandala, now AirAsia-Batavia... I'm guessing those A330s may be put to some good use on certain lucrative routes between Bali and East coast Australia!

[flee 5]

Indonesia will see two giant LCCs - Lion and Garuda's Citilink. Smaller airlines will have to grow or die. Batavia probably felt that they will find it hard to finance growth and linking up with AirAsia might open up access to capital. AirAsia Indonesia is still small at the moment and also needs to grow quickly if it is to be able to compete in that market.

 

What remains to be seen is how this will be executed and what impact it will have on QZ's IPO. Logically, Batavia Air should merge with QZ and exploit the AirAsia brand to the full. Its fleet of aircraft is old - and they will need to phase these fuel guzzlers out and replace them with more fuel efficient planes.

 

Interesting development in Indonesian aviation...

[flee 5]

TF Tweets:

Today is a huge step for airasia and airasia indonesia. At 2.30 we make a major announcement. Our growth and profitbaility is assured now in Indonesia.

[flee 5]

JAKARTA, July 26 (Reuters) - Malaysian budget airline AirAsia Bhd will buy Indonesian low-cost carrier Batavia Air to expand in Southeast Asia's biggest economy, the two groups said on Thursday.

 

The move, AirAsia's first airline acquisition, will likely lead to heightened competition among low-cost carriers in Indonesia. The field is already crowded with players like Lion Air, the nation's biggest, Mandala Air, which is controlled by private equity firm Saratoga Capital, and Citilink, a unit of flag carrier Garuda.

 

The acquisition is also seen as helping AirAsia compete against regional rivals like Tiger Airways Holdings Ltd and Singapore Airlines Ltd once the Southeast Asian open-sky policy comes into effect in 2015. That policy will allow the budget carriers to fly more regional routes and removes various restrictions on passenger, cargo and charter services.

 

Batavia Air confirmed the acquisition, but declined to comment about details. Financial terms of the deal were not disclosed.

 

AirAsia's founder and CEO Tony Fernandes called the acquisition a "huge step" for AirAsia and said on his Twitter feed that his airline was now a "major player in Indonesia."

 

"This news in Indonesia will have a very positive effect on our earnings over the next few years," Fernandes tweeted.

 

Fernandes said in early May his group was looking to list its Indonesian operations by the first quarter of next year as it moves its regional base to Indonesia to focus on further expansion.

 

"There will also be a positive impact on its Indonesian unit's listing. The IPO will be helped by this acquisition," said an aviation analyst with MIDF Research in Kuala Lumpur, who asked not to be named because he was not authorised to speak to the media.

 

The move is somewhat of an about-face for Fernandes because he previously said he was against acquisitions, calling them "value destroying" in an interview with Reuters a year ago.

 

AirAsia will benefit from Batavia Air's strong agent network in Indonesia, said Ahmad Maghfur Usman, a Kuala Lumpur-based equity analyst with OSK Research.

 

"The Internet penetration in Indonesia AirAsia in terms of ticket bookings is not as great as Malaysia or Thailand. So that's why AirAsia sees value through the purchase of Batavia Air," he added.

 

AirAsia officials in Indonesia said a signing ceremony and press conference would be held later Thursday in Jakarta.

 

By 0310 GMT, shares of AirAsia were unchanged at 3.74 ringgit per share compared to Malaysia's benchmark index which was down 0.16 percent.

 

Source: http://www.reuters.c...E8IQ0TB20120726

[flee 5]

AirAsia to buy Indonesia's Batavia Air for $80 mln

 

Asia's largest low-cost carrier, AirAsia Bhd has agreed to pay $80 million in cash for full ownership in Indonesia's Batavia Air, the company said in a statement on Thursday.

 

AirAsia will buy 76.95 percent stake of Batavia Air this year and the rest by 2013, it said.

 

Malaysia-based AirAsia will own 49 percent of Batavia Air while its Indonesian unit will control 51 percent in order to comply with Indonesian ownership rules.

 

Source: http://www.reuters.com/article/2012/07/26/airasia-batavia-idUSL4E8IQ30O20120726

[Mike P 0]

KCH is the only route in Malaysia served by Batavia, from Pontianak. Probably gonna be taken over by Indonesia AirAsia then.

[Waiping 12]

Bad for spotter?

[flee 5]

Yes, I foresee Batavia Air to be totally integrated into Indonesia AirAsia (they will hold 51%) and all its landing rights will be used by them too. The tricky part is to return all the leased aircraft, especially the Boeings and the two A332s - but AirAsia Indonesia are also skilled at doing that.

[Waiping 12]

Hey, before that, how about a Batavia/AirAsia hybrid color.

[Robert 0]

I took them SIN-CGK a few weeks ago. The interior of the plane was old and worn with very cramped seats. Air Asia offer a better product by far.

[Mohd Azizul Ramli 2]

As a former frequent flyer of Batavia, this is an extremely interesting news!

 

I am wondering how the structure will be post acquisition - whether Y6 is going to be absorbed into QZ or both Y6 and QZ will continue to run as a separate entity. Taking the case of the acquisition of Mandala by Tiger, the former is totally being absorbed by the latter, with the exception of its operating codes (RI, MDL and Mandala), the brand name 'Mandala' and its website, all of which are remnants of the original Mandala.

 

I think it is stated in the Indonesian law that for such takeover, AirAsia has to maintain the brand name 'Batavia' for the post acquisition entity.

 

Also how the fleet of the post acquisition entity will consist of. Y6 flies to many domestic airports in Indonesia which still can not handle the A320s hence the need to maintain the large fleet of old 737s aircraft. Are they going to standardise the fleet to A320s only which means they will discontinue services to the airports that can not handle the aircraft type?

 

Also interesting to see is how the selling channel will look like post acquisition. Although Y6 has its own website, the main selling channel for the airline is still through its extensive branch offices and local travel agencies. Such method is quite contrary to the norm of AirAsia group which relies heavily on its website.

 

One thing for sure is that QZ's network will quadruple by a night after the acquisition with reach as further as Jayapura and Merauke near the border of Papua New Guinea to the east, Jeddah in Saudi Arabia to the west, Hangzhou to the north and Dili in Timor Leste to the south.

 

Tremendous achievement to the AirAsia group for this major score!

[flee 5]

It should not be a problem for Batavia Air to be under AirAsia Indonesia, should it? That is a little bit different from Tiger Mandala as Tiger is not an existing Indonesian brand.

[flee 5]

AirAsia and partner acquire Batavia Air

 

Low-cost carrier AirAsia, together with a partner firm, has inked an agreement to acquire Indonesian carrier Batavia Air, in a move that will allow it to capture a bigger portion of the growing Indonesian market.

 

Under the conditional share sale agreement, AirAsia and trading firm Fersindo Nusaperkasa, which owns a 51% stake in AirAsia Indonesia, will acquire Metro Batavia for $80 million in cash. Metro Batavia operates both Batavia Air and aviation training school Aero Flying Institute.

 

AirAsia will hold a 49% stake in the deal while Fersindo will hold the majority 51%.

 

The acquisition will be carried out in two phases - first a buyout of a 76.95% stake followed by the remaining 23.05%, AirAsia said in a statement.

 

The deal is expected to be concluded by the second quarter of 2013, subject to Indonesian regulatory approvals.

 

It will also increase AirAsia's competitiveness in a market crowded with LCCs such as Lion Air, Mandala Air and Citilink.

 

"The addition of Batavia Air will provide AirAsia 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," says AirAsia.

 

The acquisition of Batavia will provide greater domestic connectivity and an extensive feeder network into AirAsia Indonesia's existing hubs in Jakarta, Bandung, Denpasar, Medan and Surabaya. Once complete, the two airlines will together be able to fly more than 14 million passengers to 42 Indonesian destinations, AirAsia says.

 

Batavia Air operates a fleet of 33 737s, A320s and A330 aircraft.

 

"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," says AirAsia group chief executive Tony Fernandes.

 

Fernandes recently relocated to Jakarta, where he is leading the carrier's regional office to focus on growth in the region.

 

Source: http://www.flightglo...via-air-374771/

[Mohd Azizul Ramli 2]

It should not be a problem for Batavia Air to be under AirAsia Indonesia, should it? That is a little bit different from Tiger Mandala as Tiger is not an existing Indonesian brand.

 

I don't think it is that easy. Indonesia has been quite difficult with some of their regulations with regards to foreign stakeholdings. It will be a different case if QZ is the one who own 100% shares of Y6, but Y6 shareholding composition is the same as per QZ, where 49% of the share is own by the AirAsia Group. From AirAsia Group structure point of view, Y6 sits on the same level as QZ, not under QZ, despite it is a local brand.

 

Here is the network that will be added to the AirAsia Group after the acquisition of Y6. Pretty extensive and impressive I would say.

 

 

[flee 5]

Yes, it is difficult but I think they are taking a longer term view - looking at the ASEAN Open Skies in 2015.

[Mohd Azizul Ramli 2]

I think we would see all Y6 flights to be relocated to CGK T3 too as per all QZ and AK flights. Trust Lion Air will fill Y6's void in T2 soon.

[nrazmoor 0]

Im wondering, when will Lion Air coming to Malaysia in a big way??

Edited July 26, 2012 by nrazmoor

[Tafe 0]

Im wondering, when will Lion Air coming to Malaysia in a big way??

 

I supposed none of Indonesian carrier would make big leap into Malaysian market. Their domestic market is more lucrative.

[flee 5]

Also how the fleet of the post acquisition entity will consist of. Y6 flies to many domestic airports in Indonesia which still can not handle the A320s hence the need to maintain the large fleet of old 737s aircraft. Are they going to standardise the fleet to A320s only which means they will discontinue services to the airports that can not handle the aircraft type?

Perhaps that is why they are talking to Bombardier about the C-series?

 

They might use this on routes that cannot be served with the A320.