AirAsia scraps deal to buy Indonesia's Batavia Air
KUALA LUMPUR (REUTERS/AP) - AirAsia, Asia's largest budget carrier, has scrapped a US$80 million (S$97.8 million) deal to buy Indonesia's Batavia Air because the move would have carried too many risks, AirAsia Group CEO Tony Fernandes said.
Malaysia-listed AirAsia had announced plans in July to acquire Batavia in a bid to expand in Southeast Asia's biggest economy. It would have been AirAsia's first major airline acquisition and would have ratcheted up competition in Indonesia among low-cost carriers such as Lion Air and flag carrier Garuda's Citilink unit.
"Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with Batavia Air," Mr Fernandes said in a statement on Monday.
"The company's decision was based on a thorough evaluation by many parties into 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," he added.