Eyes on Indonesia for low-cost battleground

Competition continues to step up in the big growth market in Indonesia as AirAsia today announced plans, in co-operation its Indonesian partners, is acquiring local carrier Batavia. It strengthens AirAsia’s presence in a market where it is already present through Indonesia AirAsia – in which it holds a 49% stake. Indonesia AirAsia currently operates 20 aircraft carrying 5 million passengers in 2011. Batavia operates 33 aircraft – a mix of Boeing 737s, Airbus A320s and A330s. AirAsia says combined the airlines will fly 14 million passengers.

Indonesia has been the centre of rapid growth in the low-cost segment, driven by fast-growing Lion Air but which also sees Mandala Airlines – which resumed flights in April and is part-owned by Tiger Airways – and Citlink, which this month received its own AOC as the Garuda Indonesia unit takes steps to operate as an independent entity, battling for a piece of the pie.

It is just one of several markets in Asia which has seen a string of dynamic activity in the low-cost segment. For a quick and easy catch-up on recent event, see our recent guide to Asia market developments we did in this year’s Airline Business interactive low-cost carrier special. 
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