Contemporary Issues in Management

Topics: Malaysia Airlines, Airline, Low-cost carrier Pages: 8 (2320 words) Published: March 15, 2013
Assessment 1 – Individual Report

AirAsia acquired
Batavia Airlines of Indonesia

BUSI 1475 – Contemporary Issues in Management
Mr. Jude Nesa Rajah

Bachelor of Arts (HONS) In Business Management

(General Business)

Name: SONY
N.R.I.C: G1094541R
S.I.D: 1003295

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

References Page 11

executice summary

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...

References: Ahniar, N. F. & Kurniawan, I. (2012). AirAsia’s Reasons acquired Batavia Air. Accessed on November 27, 2012 from VIVANEWS, available at:
BBC. (2012). Air Asia’s Tony Fernandes: ‘Competition is good’. Accessed on October 26, 2012 from BBC NEWS Business, available at:
Latif, S. & Kurniawan, I. (2012). Buy Batavia, AirAsia will ahold Indonesian Sky? Accessed on November 26, 2012 from VIVANEWS, available at:
Mun, K. & Ghazali. (2011). Branding satisfaction in the airline industry: A comparative study of Malaysia Airlines and Air Asia. African Journal of Business Management, 5(8):3410-23.
Prayogi, W. E. (2012). AirAsia Buy 76,95% Stake in Air Batavia USD 720 billion. Accessed on November 25, 2012 from detikFinance, available at:
Rahman, M. R. (2012). Step road of AirAsia acquisition Batavia Air. Accessed on November 26, 2012 from, available at:
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Contemporary Management Issues Essay
  • Essay on Contemporary Issues in Management
  • Contemporary Management and Leadership Issues Essay
  • Contemporary Management Issues Essay
  • Program Management for Mental Issues Essay
  • Contemporary issues in human resource management Essay
  • Management and Common Health Issues Essay
  • Contemporary issue Essay

Become a StudyMode Member

Sign Up - It's Free