Malaysia-based AirAsia wing will own 49% of Batavia Air while the airline’s Indonesean wing will control 51%, in order to comply with Indonesian ownership rules.

AirAsia will buy 76.95% stake in Batavia Air this year and the rest by 2013, it said in a statement today (July 26).

Tony Fernandes, AirAsia Group CEO, said: “The Batavia Air acquisition is a fantastic opportunity for AirAsia to accelerate our growth plans in one of the most exciting aviation markets in Asia and further underlines our belief in the growth potential of Indonesia’s aviation sector.”

Batavia Air was founded in 2002 as a domestic airline in Indonesia. Operating a fleet of 33 aircraft, Batavia serves 41 domestic routes and has recently expanded its network to international destinations such as Singapore, Jeddah, Riyadh, Kuching, Dili and Guangzhou.

AirAsia said the acquisition would give it “greater domestic connectivity”. Together, Batavia Air and Indonesia AirAsia will fly more than 14 million customers, serving 42 domestic and 12 international destinations.

Fernandes added: “Indonesian air travellers can look forward to even more affordable fares soon.”

The airline announced its new venture, AirAsia Asean, which will be based in Jakarta, last month.

Fernandes remained as Group CEO but moved across to head up the new AirAsia Asean operation, while Aireen Omar was named CEO of AirAsia in Malaysia.

AirAsia said the move was designed to tap into an “underserved market” of three billion people spread across the ASEAN nations, North East Asia and South Asia.