Last updated: March 16. 2013 11:01PM - 149 Views

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(AP) Indonesia's commercial court has declared budget carrier Batavia Air bankrupt months after AirAsia, Southeast Asia's top low-cost airline, aborted a deal to buy it.

Agus Iskandar, presiding judge at the Jakarta Commercial Court, said Thursday a bankruptcy petition filed by U.S.-based International Lease Finance Corporation, or ILFC, was approved after Batavia Air failed to pay a $4.7 million debt that was due Dec. 13. Flights abruptly stopped Thursday, stranding passengers.

He said Batavia's debt was related to the purchase of two Airbus A330s financed by ILFC through a leasing scheme.

Batavia failed to secure a contract to use the planes to fly hajj pilgrims to Mecca as planned.

Malaysia-based AirAsia abandoned an $80 million deal to buy Batavia in October after determining it was too risky and may hurt earnings.

Associated Press
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