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T Fersindo Nusaperkasa, owner of a 51 percent stake in the low-cost carrier Indonesia AirAsia (IAA), was committed to complying with the rules when acquiring the domestic airline Batavia Air, a senior company official said on Wednesday.

“I have been working in this industry for 35 years. My team and I know the rules exactly and how to do business here and I guarantee that we will follow Indonesian rules,” Fersindo president director Dharmadi told The Jakarta Post.

According to Indonesian rules, foreign ownership of airlines is capped at 49 percent, leaving the remaining 51 percent of shares in the hands of Indonesians.

On Monday, the Business Competition Supervisory Commission (KPPU) said they would look into the composition of ownership in the parent companies of IAA, of which 49 percent is controlled by Malaysian-based AirAsia Berhad, to make sure that the Malaysian company did not control too much domestic market share.

“Fersindo is purely a domestic investor company. We would be disappointed if people doubted our domestic status,” Dharmadi said.

He said he had recently talked to the Transportation Ministry’s air transportation director general Herry Bhakti Gumay, explaining that the composition of Batavia Air would be similar to IAA, with 51 percent domestic shares and the remaining 49 percent foreign-owned.

“We do not have hundreds of aircraft like Lion Air or Garuda Indonesia,” he said.

The KPPU fears that the acquisition by the owners of IAA would create a business entity that would control more than 50 percent of the domestic market in violation of the 1999 law on unlawful business practices.

KPPU head Tadjuddin Noer Said said they would annul the acquisition if it had the potential to stop other carriers from growing in the aviation industry.

By operating 45 aircraft: 21 aircraft belonging to IAA and 24 to Batavia, they expect to carry 14 million passengers this year, accounting for 20 percent of the market.

According to Transportation Ministry data, the number of airline passengers in Indonesia reached 68.19 million last year; 60.04 million domestic passengers and 8.15 million international passengers.

IAA became the strongest international player in 2011 by carrying 3.38 million passengers, or 41.58 percent of the international market, while it carried only 181,200 domestic passengers, 3 percent of the domestic share. Ministry
data showed that Batavia Air flew almost 7 million passengers last year; 6.75 million domestic and 292,280 international passengers, or 11.25 percent and 3.59 percent respectively of the 2011 market shares.