REPUBLIKA.CO.ID, JAKARTA - AirAsia Berhad and PT Fersindo Nusaperkasa, the owner of Indonesia AirAsia, aborted the acquisition of Batavia Air. AirAsia said the acquisition would have "induced too many risks" and hurt earnings.

Due to the cancellation, AirAsia Berhad changes its strategy on Conditional Share Sale Agreement (CSSA) signed by both parties on July 26, 2012. The CEO of AirAsia Group, Tony Fernandes, said the decision was made according to evaluation of several parties.

"We always knew it was not going to be an easy transaction. It has been a very good experience and we come out of it feeling more confident of what we need to do to grow the market in Indonesia," Fernandes said. "Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with Batavia Air.

President Director of AirAsia Indonesia, Dharmadi, said the company was still optimistic that the airline would grow despite the acquisition was cancelled. 

The Managing Director of Batavia Air, Alice Tansari, said AirAsia and Batavia Air had drafted a new agreement. Both will be partnered only on land operational management, distribution, and inventory system.

Batavia Air's commercial director Sukirno Sukarna told the Associated Press in Jakarta that the deal was called off as the two parties failed to reach an agreement.

"This is not the end of the world for Batavia because we will still continue our business without the acquisition," he said.

AirAsia, which started in 2001, has grown exponentially with a current fleet of more than 115 aircraft. It has ordered a total of 375 Airbus planes in an ambitious regional expansion with affiliates in Indonesia, Thailand, the Philippines and Japan. AirAsia set up its regional office in Jakarta in June to tap Indonesia's population of 240 million and a rapidly growing middle class that is hungry for cheap air travel.

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