Air Asia acquires stake in Batavia Air; opening for CSeries?

Air Asia will acquire 77% of Batavia Air and the rest of the shares next year.

Air Asia is an A320/A330 operator. Batavia has a mix of A320s, A330s and Boeing 737 Classics. We can’t help but wonder if the flirtation at the Farnborough Air Show between Air Asia’s Tony Fernendes and Bombardier over the CSeries might be tied to Batavia.

12 Comments on “Air Asia acquires stake in Batavia Air; opening for CSeries?

  1. Would be nice, but I don’t think so – I thnik it’s more likely that Batavia will merge with AirAsia Indonesia and this might be the reason why Tony Fernandes wants 50-100 more A320ceo’s as soon as possible. The Batavia fleet is a wild mix of old aircraft and needs replacement anyway. Air Asia Indonesia currnetyl has 19 A320’s, Batavia 33 narrowbodies, so they need 50 new A320’s to at least match Lion’s growth. But maybe they need both A/C (A320 and CSeries) to have a chance against Lion Air – who knows…

  2. I was trying to understand why Air Asia would want to buy Batavia Air, which is on its last legs. Particularly when Air Asia has its own more successful operation in Indonesia. A clue, possibly, from Flight Global: they are after slots at constrained airports.

    This might suggest larger aircraft than the CSeries. Air Asia Indonesia’s fleet is entirely A320s.

    Air Asia is also very concerned about the dominance in Indonesia of Lion Air, a Boeing only customer.

  3. Tony was talking about 100 CSeries at Farnborough, which would imply more than Batavia, which only operates 33 narrow-bodies today, or an exponential growth curve. I think that Bombardier’s route analysis, showing how the CSeries can be profitable to smaller cities that currently wouldn’t be profitable with 737 or A320, might be the key as a key for AirAsia and its units to continue growth while opening new markets that previously would not have been profitable.

  4. Now, with the pay by hour maintenance contracts … for engines …
    Any sub fleet may be justified in the 50-100 A/C ! And better if not too dispersed !

    My story is …
    Just imagine one year ago, an Asian company buy a large lot, of A320 NEO to their “Friends” JL / TE from Airbus ! !
    Just imagine that after this year price war, this Asian company see every other large customer in the world, pay at least 10% lower prices … for the same aircraft’s …
    Just imagine this Asian company needs 50-100 A/C more and claims fore some compensations …
    Just imagine Airbus and JL stick to the 2011 contracts …

    You may imagine what have to follow !

    Just my imagination !

  5. Tony Fernandes was somewhat diffident about his negotiations with Bombardier. It seems his real interest in the plane is for its short field performance. I am guessing he is interested in the XT version of the CSeries plane.

  6. The Boeing 737 Classics are probably going to be the first to go out. Maybe those will get replaced by a possible CSeries order.

    • The CSeries would be an easy replacement for Classics. Even the 736s could possibly be replaced if BBD were to create the high-density configuration for Air Asia.

      But I agree with Ernest, 100 A/C seems too much for Batavia alone.

  7. Since last year, and before the buy out of Batavia, Tony Fernandez was looking after 50 A/C more …. from Airbus … now, he may well look after 100 A/C either from Airbus or Bombardier !

  8. Buying Batavia would seem more about market access. Slots, flight crews, ground and line staff – all these things are in short supply given the pace of growth in Indonesia. On top, with a predominantly Airbus fleet, it will be easy to fit the Batavia operation into the Airbus-centric AirAsia operation.

  9. It seems to me that few people, if any, take into account the large number of NG’s and OEO’s of more recent vintage that leasing companies will be looking to place as their current lease contracts expire. For many airlines, especially flying Classics and older OEO’s, the most economical upgrade solution would be to lease (or in some cases buy) these these aircraft instead of going the new aircraft route.

    Another point that very analysts and bloggers even raise, let alone discuss, is the very real possibility of oil prices trending downward over the next few years to the $50-$60/bbl range. If that were to happen there would be far less pressure to upgrade from NG’s and OEO’s. One can imagine the impact on new aircraft sales.

    Finally, coupled with ongoing consolidation, the industry could look quite different 5 years from now.

  10. Did anyone notice that the scale model of the CSeries that was presented to Tony Fernandes at Farnborough is actually a CS100. This could be an indication that any order that might come from Air Asia could be a split between the CS100, CS300 and/or CS300 High Density (160 seats).

    Air Asia is reportedly interested in the CS300XT to serve high altitude and/or short runway airports. And the XT is actually a CS100 equipped with CS300 engines.

    http://www.flickr.com/photos/bombardieraerospace/7555277828/in/photostream/lightbox/

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