An Air Asia Airbus A320-200 aircraft approaches its parking space at the Low Cost Carrier Terminal (LCCT) in Sepang, outside Kuala Lumpur March 21, 2012.

KUALA LUMPUR | Sun Oct 14, 2012 10:29pm EDT

KUALA LUMPUR (Reuters) - AirAsia (AIRA.KL), Asia's largest budget carrier, has scrapped a $80 million deal to buy Indonesia's Batavia Air because the move would have carried too many risks, AirAsia Group CEO Tony Fernandes said.

Malaysia-listed AirAsia had announced plans in July to acquire Batavia in a bid to expand in Southeast Asia's biggest economy. It would have been AirAsia's first major airline acquisition and would have ratcheted up competition in Indonesia among low-cost carriers such as Lion Air and flag carrier Garuda's (GIAA.JK) Citilink unit.

"Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with Batavia Air," Fernandes said in a statement on Monday.

"The company's decision was based on a thorough evaluation by many parties into Batavia Air. In our minds, the timing was perhaps not appropriate as it would have induced too many risks and would ultimately be earnings dilutive to our shareholders."

Fernandes in the past has expressed caution towards acquisitions, calling them "value-destroying" in an interview with Reuters last year.

AirAsia will now collaborate with Batavia Air on other aspects of the aviation business, including a training joint venture to address an expected skilled pilot shortage in Indonesia, the statement said.

AirAsia shares were down 0.3 percent in early trade.

(Reporting by Niluksi Koswanage; Editing by Chris Gallagher)

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KUALA LUMPUR | Thu Sep 27, 2012 6:05am EDT

KUALA LUMPUR (Reuters) - Malaysia's Tune Group, a financial services-to-discount hotel conglomerate owned by AirAsia Bhd's founders, said it plans to list its insurance arm in a move to fund the company's expansion overseas.

Tony Fernandes and Kamarudin Meranun, who in 1993 founded Asia's biggest budget carrier, plan to list Tune Insurance Malaysia in a move that comes hot on the heels of other planned initial public offerings by AirAsia.

These include listings by AirAsia's long haul arm AirAsia X and its Indonesian unit.

"Tune Insurance is definitely going to be the first candidate to go public under the Tune brand. As to when, we are looking at it but no news as of yet," Fernandes told reporters on Thursday in the Malaysian capital.

"It has a good business, it is in a fantastic part of the world, which is under insured. We are looking at acquisitions in Thailand, Indonesia and the Philippines," he said in reference to Southeast Asia.

It was not immediately clear how much the IPO intended to raise and where the company would list.

Tune Group has been expanding its insurance business in preparation for the listing.

In April, Tune Group bought a 77.9 percent stake for 153.13 million ringgit ($49.69 million) in Oriental Capital Assurance Bhd, in a move to beef up its financial services division and allow it to underwrite its insurance businesses.

Tune Group now owns some 83 percent in Tune Insurance, according to its chief executive officer Peter Miller. It could not be immediately ascertained who owned the remaining stake. ($1 = 3.0820 Malaysian ringgits)

(Reporting by Yantoultra Ngui and Anuradha Raghu; Editing by Muralikumar Anantharaman)

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