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NEWS UPDATES Asean Affairs    18 October 2012 

AirAsia drops plan buy Batavia Air


AirAsia has dropped its plans to acquire Batavia Air, two months after it made the offer as part of a long-term expansion plan in one of the world's most lucrative markets, from which it planned to become a dominant player in Asean.

 AirAsia's chief executive Tony Fernandes cited "too many risks" as the reason for the about-turn, but maintained it was not a setback.
Instead, both carriers will revise their agreement to collaborate on operational areas like ground handling, distribution and inventory, as well as pilot training.

Indonesia's sprawling archipelago of 17,000 islands, large domestic market and rising affluence has fuelled an aviation growth that is among the fastest in the world, spurring foreign players to aim for mergers to get a slice of the pie.

The US$80 million acquisition plan announced in late July was billed as a "perfect marriage" - a way for AirAsia to increase its market share in Asean and for Batavia Air to claw out of its debt load, estimated at $40 million.

The Malaysian low-cost carrier was to own 49 per cent of Batavia Air, while its Indonesian partner, Fersindo Nusaperkasa, was to control 51 per cent, in order to comply with Indonesian ownership rules.

But the plans were scuttled, partly due to AirAsia's request to lower its offered price, which Batavia Air refused, according to local business daily InvestorDaily, citing a source.

Batavia Air's commercial director Sukirno Sukarna said the company had held a meeting with AirAsia and Fersindo late last week. The discussion touched on measures to lower costs, such as cutting the number of flights.

He said the failed deal was not "the end of the world" for the carrier, as it would continue its business.

Yesterday, Fernandes said: "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.

"Our aggressive focus in Indonesia remains, and we will push our Indonesian IPO (initial public offering) plans while still maintaining close cooperation with Batavia Air," he added. Its launch target is early next year.

Despite this turbulence, the former music industry executive tweeted: "We have learnt a tremendous amount, and feel very confident that we will be a market leader in Indonesia."

Shukor Yusof, an aviation analyst at Standard and Poor's equity research, said AirAsia would find it tough to realise its goal in Indonesia.

Local airlines in the low-cost sector like Lion Air command over half the domestic market, and foreign players have partnered with local carriers to tap and grow the local market, for example, Tiger Airways has tied up with Mandala Airlines.

AirAsia's share of the domestic market is around 8 per cent, but it is Indonesia's biggest player on international routes, with a market share of 42 per cent.


Read the rest of the Story below...


First time outside China and first time in Bangkok: A Multi-Billion$ industry event
The 7th Railworld Summit 2012, Oct 24-26, 2012. The Dusit Thani hotel, Bangkok, Thailand

China’s leading event organizer CDMC (China Decision Makers Consultancy) and AABC (AseanAffairs Business Council) – the business platform of C.I.A. (China-India-Asean) and AseanAffairs- the only global media dedicated to SE Asia brings to Bangkok and Asean for the first time, the prestigious Rail World Summit 2012 to be held for the seventh time and first time outside China.

Southeast Asia is one of the most dynamic, fast-growing regions in the world today. It offers a market of 590 million people, rich natural resources, skilled labor, and an export industry concentrated in global high-growth sectors – all tied together in a free-trade area, ASEAN.

This year’s event will enter a new chapter in Bangkok, Thailand, 24th-26th October. The three-day summit will address the most critical industry issues in Southeast Asia and globally and will draw attendees from government, railway authorities, projects, equipment and technology companies, aiming to help to gauge the pulse of this dynamic industry and get caught up with the most cutting edge railway technologies.

The market for rail technology in Southeast Asia currently has a volume of approximately EUR 1.8 billion. The market will grow at a significantly higher level than other regions. We expect growth of 6% per year to around EUR 2.4 billion in 2016. Though the region makes up only a small share of market volume for railway technology in Asia compared to China, India and Japan, the region is very interesting for international players due to its relative openness and low local competition.

The summit has been extended to feature a post-congress full-day site tour on the third day, which is a tailor-made site visit with high-end reception designed to witness the remarkable advancement of industry facilities, and will leave with practical skills and new contacts.

The conference will draw over 270 participants, bringing together with government and association, railway authorities, metro/LRT operators, project owners, planning & design institutes, equipment & technology vendor and IT solution companies.

Some of the confirmed companies
from Europe, USA, China, India, Japan, Korea, Cambodia, Thailand, Indonesia, Malaysia......Beijing Subway Operation Co., Ltd,  Siemens, Chongqing Rail Transit Corporation, AEG Brazilian National Agency for Land Transport, Rutherford Global Power, China Railway Group Limited,  Balfour Beatty Rail,  Shanghai Shentong Metro Co., Ltd, Ministry of Railways P.R.C., ADB ,Knorr-Bremse SfS GmbH, Indian Railways, Beijing-Shanghai High-Speed Railway Co., Ltd, Bayer Materials, Korea Rail Networks Authority, GE Transportation,  BAE Systems, ABB Ashurst, EAO Zoller + Fröhlich GmbH, Kawasaki Heavy Industries Ltd.,Rockwell  Hitachi Cable, Nexans WaveTrain Systems, Itochu, Cisco   RZD ZOOMLION Komatsu, Halfen Rail Innovation Australia Pty Ltd, MAHLE Behr Industry Cooling Equipment (Tianjin) Co., Ltd.  Böhler Uddeholm, MITSUBISHI ELECTRIC CORPORATION, Rogers (Shanghai)

International Trading Co., Ltd. Freshfields Bruckhaus Deringer TOLL, Royal Cambodia railways, Nanjing Metro, Delhi Metro Rail Corporation,Konkan Railway Corporation Ltd. , Beijing Dinghan Tech Co., Ltd. , HOPPECKE Battery System GmbH, Crane Aerospace, CSM ERL Maintenance Support Sdn Bhd, Metrosolution Zublin, Mitsui & Co., Ltd., Fuji Electric, Voestalpine BWG GmbH & Co.KG, MRT Jakarta,  TUV Rhainland, Beijing General Municipal Engineering R & D Institute,  Guangshen Railway Co., Ltd   MOOG   Centro Sviluppo Materiali SpA Ashida ELECTRONICS (P) LTD. ,Technical Expert Network, UBM, Jindal Steel, Herbert Smith Bureau Veritas, China Railway 23rd Bureau Group Co.,Ltd. Bangkok Metro, Bangkok Metropolitan Authority, Land Public Transport Commission (SPAD, Malaysia).

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Batavia Air has an 11 per cent market share, and nearly 4 per cent share of international routes out of the country.

"Batavia Air might stand to lose more as it has lost a strong partner that could help increase dominance and resolve its debt issues," said Mr Yusof.

AirAsia's fleet has grown from two planes in 2001 to 115, flying over 100 routes across Asia and Australia.

Dharmadi, who heads AirAsia Indonesia, said the carrier will now focus on fleet expansion next year. "We are looking to more than triple our fleet size in the next five years to accommodate an average annual passenger growth rate of 24 per cent and 28 per cent in the international and domestic markets respectively."

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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