Indonesia AirAsia to disappear in merger: Ministry

Indonesia AirAsia (IA) will soon cease operating. The company will be merged with Indonesia AirAsia X (IAX) to save the airline from losing its flight permit.

“By merging with IAX, IA’s equity is no longer negative, and IAX doesn’t have negative equity since it hasn’t yet being audited and has been operating for less than a year,” said Transportation Ministry director general for air transportation Suprasetyo on Wednesday as quoted by tempo.co.

According to Suprasetyo, after the merger, IA will no longer exist. All its operation in Indonesia will be under the IAX brand, which serves medium- and long-haul flights. Thus, he added, IAX had to submit new business plans and arrange new flight permits to allow them to use the routes that were currently operated by IA.

IA is one of 13 carries that have negative equity according to the ministry’s July 2015 report.

The ministry has threatened to revoke those airlines’ flight permits if they are unable to convert their equity to positive before Sept. 30.

IA president director Sunu Widiyatmoko refused to comment on the matter.

Meanwhile, IAX CEO Dendy Kurniawan said that he was waiting for an official statement from the ministry.

“I don’t want to move ahead of them,” said Dendy.