The move may have been precipitated by the recent Indonesian Transportation Ministry (ITM) threat to revoke air operator certificates (AOCs) for airlines that reported negative equity.
In July, ITM named 13 Indonesian carriers that did not comply with Indonesian fleet and operations funding requirements, one of which was Indonesia AirAsia.
“We will revoke [AOCs] if we find out that they are not capable of flying,” said Indonesian Transportation Minister Ignasius Jonan at the time.
By merging with IAAX, IAA will no longer show negative equity and will be able to continue operating under ITM regulations. As IAAX has been operating for less than a year, it does not show any negative equity—or officially audited loans that overbalance its registered assets.
A merger would also benefit IAAX, which is currently in discussion with the ITM over compliance with Indonesian Law No. 1, 2009 on Flight, which requires any Indonesian airline operating scheduled commercial flights to operate at least 10 aircraft, with a minimum of five wholly owned and the remainder leased.
The wrapping of IAA's 29 Airbus A320s onto IAAX's fleet of two Airbus A330-300s would solve both compliance problems at once.
However, if the merger goes ahead, all IAA operations in Indonesia under a merged brand could require the submission of a new business plan and new flight permits for existing IAA routes, said Indonesian DG air transportation Suprasetyo, in a Jakarta Post report.
(Jeremy Torr - ATWOnline News)