AIRASIA and its Indonesian partner, Fersindo Nusaperkasa, have entered into a conditional share sale agreement to acquire Metro Batavia Group, which operates the Indonesian carrier, Batavia Air.

In accordance with Indonesian civil aviation ownership regulations, AirAsia will hold a 49 per cent stake in Metro Batavia, while the remaining 51 per cent will be held by Fersindo – also the majority shareholder of Indonesia AirAsia.

The total purchasing consideration for Metro Batavia is US$80 million. Scheduled to close by 2Q2013, the acquisition will be carried out in two stages, through purchase of a majority 76.95 per cent stake, and subsequently, the remaining 23.05 per cent held by shareholders.

The Batavia Air deal is expected to provide greater domestic connectivity and an extensive feeder network into Indonesia AirAsia’s existing hubs in Jakarta, Bandung, Denpasar, Medan and Surabaya.

Once the deal is completed, Batavia Air and Indonesia AirAsia will jointly serve 42 Indonesian and 12 international destinations, while the carriers' distribution channels in Indonesia will increase ten-fold to over 5,000 authorised agencies and more than 70 sales outlets.

“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,” said Tony Fernandes, AirAsia group CEO.

“Recent developments in the airline industry have made me recognise that Batavia Air requires greater scale in order to compete and grow further,” said Bapak Yudiawan Tansari, Batavia Air’s founder.

Launched in 2002, Batavia Air operates a fleet of 33 aircraft, serving 41 domestic routes. The carrier recently expanded its network to international destinations such as Singapore, Jeddah, Riyadh, Kuching, Dili and Guangzhou.