Batavia Airlines of Indonesia
BUSI 1475 – Contemporary Issues in Management
Mr. Jude Nesa Rajah
Bachelor of Arts (HONS) In Business Management
30th NOVEMBER 2012
Table of Contents
Table of Contents Page 2
Executive Summary Page 3
Introduction Page 4
What is happen between AIrAsia and Batavia Air? Page 5
Purchasing Batavia Air’s Stake by Malaysia AirAsia Bhd. and Indonesia AirAsia Page 6 Some of the parties affected by the Acquisition of Batavia Air by Air Asia Page 7 Is the problem solved? Page 9
CONCLUSION Page 10
References Page 11
The importance of a managerial decision-making in a company will increase the profitability and success of the company. In this report, the authors describe a managerial decision made by the CEO of AirAsia and PT. Metro Batavia (Batavia Air) Indonesia.
In this report the authors describe in detail the acquisition agreement made by Malaysia AirAsia and its partnership with the company in Indonesia, PT. Fersindo Nusaperkasa (Indonesia AirAsia) to acquire a 100 percent stake in Batavia Air at a price of 80 million U.S. Dollars. With this acquisition agreement, the two companies can be mutually beneficial.
Furthermore, in this report the authors also describe the effect that occurs to some others on this acquisition deal. The existence of this acquisition affects the economy of the two countries concerned, namely Malaysia and Indonesia. Besides this acquisition also affect competitors in Indonesia AirAsia, customers, and social life in the country.
At the end of this report the authors also explain the settlement of the problems faced by both the airline companies. So the authors of the discussion of this issue can be concluded about the business opportunities that may be achieved by Indonesia AirAsia in the future after the acquisition is done.
PT. Metro Batavia better known as Batavia Airlines is an airline company from Indonesia. It was established in 2001 and started operations on air in Indonesia since January 2002. The airline currently has operated domestic flights to over 40 destinations, while also some flights to international destinations such as Singapore, Malaysia, and Saudi Arabia. Batavia Air also classified into the first category list in the safety and quality of aviation, by the Civil Aviation Authority of Indonesia.
The success of the airline under the auspices of PT. Metro Batavia is also seen from been taken from the list of banned carriers to fly EU airspace since 2010. Batavia Air is also the company's third-largest domestic airline in Indonesia, with a market share of 14.2%. However, each company has their challenges in running their business. One of the challenges that Batavia Air faced in their business is the tight competition by some competitor like Lion Air and Garuda Airlines which are also the successful Airlines Company from Indonesia.
On the other hand, AirAsia also an Airline Company that very success in doing their business. AirAsia is a low-cost airline originating from Malaysia. The airline was initially managed and run by the government of Malaysia. However, because it has a heavy burden and costs, the airline eventually sold, and bought by Tony Fernandes on December 2, 2001. Tony Fernandes was previously a businessman who is work for Time Warner as a former executive.
What is happen between AirAsia and Batavia Air?
AirAsia is a low cost airline which succeeded in running its business through each owned fleet has over 30 International destinations. With the strength of economic growth and also see the huge opportunities that can be taken from the country with the...