Friday August 3, 2012

AirAsia assures Indonesia Batavia Air buy will follow rules

JAKARTA: The Indonesian government has been assured that the acquisition of the domestic airline, Batavia Air, by low-cost-carrier Indonesia AirAsia (IAA) will comply with Indonesian rules.

PT Fersindo Nusaperkasa, owner of a 51% stake in Indonesia AirAsia gave its commitment on the matter.

Malaysian-based AirAsia Bhd controls the remaining 49% stake in Indonesia AirAsia.“I have been working in this industry for 35 years. My team and I know the rules exactly and how to do business here and I guarantee that we will follow Indonesian rules,” Fersindo President Director Dharmadi told The Jakarta Post yesterday.

Under Indonesian rules, foreign ownership of airlines is capped at 49%, leaving the remaining 51% of shares in the hands of Indonesians.

AirAsia recorded a strong 10.6% year-on-year passenger growth for its Malaysian operations in the first half of this year.

On Monday, the Business Competition Supervisory Commission said they would look into the composition of ownership in the parent company of IAA, to make sure the Malaysian company does not control too much share of the domestic market.

Commission head Tadjuddin Noer Said had commented that the commission would annul the acquisition of Batavia Air by IAA if it had the potential to stop other carriers from growing in the aviation industry.

Besides saying that Fersindo was purely a domestic investor company, Dharmadi said he had explained to the Transport Ministry during a recent meeting that the composition of Batavia Air would be similar to IAA, with 51% being domestic shares and the remaining 49 % foreign-owned.

Transport Ministry data revealed that total airline passengers in Indonesia reached 68.19 million last year, of which, 60.04 million were domestic passengers and 8.15 million were international passengers.

IAA has been reported as the strongest international player in 2011 by carrying 3.38 million passengers or 41.58% of the international market, while it carried only 181,200 domestic passengers accounting for three 3% of the domestic share. - Bernama

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