AirAsia acquisition of Batavia Air flies into turbulence, regulator threatens to annul deal

Passengers queue to board to a Batavia Air aircraft on the tarmac of the Soekarno Hatta airport in Jakarta July 26, 2012. Asia's largest low-cost carrier, AirAsia Bhd, is buying into Indonesia's Batavia Air to expand. - REUTERS/Beawiharta

JAKARTA: The Business Competition Supervisory Commission (KPPU) is demanding full disclosure from Malaysia-based AirAsia Bhd and PT Fersindo Nusaperkasa on their plan to acquire a controlling stake in Metro Batavia, the owner of Batavia Air, in a transaction worth US$80mil.

The anti-monopoly agency fears that the acquisition by the owners of Indonesia AirAsia (IAA) would create a business entity that would control more than 50% of the domestic market, which is in violation of the 1999 law on unlawful business practices.