ABACUS Consolidated Resources and Holdings Inc., a listed holding firm, is entering the airline business through the possible acquisition of a stake in PT Lite Airways Indonesia (Lite Airways), an Indonesian budget carrier set to start operations in the middle of 2012.
In a filing to the Philippine Stock Exchange on Thursday, Abacus said it signed an option agreement with Lite Aviation Holdings Ltd., owner of a 49-percent stake in Lite Airways. The remaining 51 percent is held by PT Tapa Investama Indonesia.
Abacus said the option, which expires at the end of January 2012, would allow it to acquire an initial 33-percent stake in Lite Aviation for $1 million. The option can be expanded to 67 percent, it added.
The company said it was drawn to the investment due to the growing prospects for airliners in Indonesia alongside potential synergies that can be generated in partnering with an air carrier.
“Lite Aviation and Abacus are in discussion about a possible joint venture in the cabin crew training and flight school projects, as Abacus has properties in Batangas that may ideally host the facilities for these projects,” the company said in its disclosure.
In a phone interview, Abacus corporate secretary Joaquin San Diego said the potential investment would have a significant impact on Abacus’ revenue stream.
Abacus booked a net income of P40.75 million in the six months to June, mainly from earnings generated from its minority stake in Pacific Online Systems Corp., a listed gaming company.
Lite Airways is projecting earnings before interest, taxes, depreciation and amortization accumulated earnings in year four at over $195 million, Abacus said.
The airline also plans to maintain a strategy to target the niche budget market to avoid competing directly with larger Indonesian air carriers like Garuda or Lion Air.
Lite has a fleet of 70-seater turboprop aircraft, making it suitable to cater to underserved “secondary airports” in large and affluent population centers.
“As new more stringent regulations on airline ownership in Indonesia come into force in 2012, it is forecast that rationalization of the market will take place,” Abacus said.
Abacus shares added 0.88 percent to P1.15 each on Thursday’s trading.
