The Indonesian government will review the acquisition of local airline Batavia air by Malaysian airline AirAsia Berhard and may cancel the plan should the transaction breaches the ownership limit for foreign firms, Jakarta Post reported on Monday.

Herry Bhakti Gumay, director general for air transport at the Transportation Ministry, said that AirAsia Berhard and its Indonesian partner in the acquisition, PT Fersindo Nusaperkasa, had yet to report their acquisition to the ministry.

Both AirAsia and Fersindo, owner of a 51 percent stake in Indonesia AirAsia (IAA), signed an agreement on Thursday to buy Metro Batavia, the owner of Batavia Air, for 80 million US dollars.

"We will give Batavia, AirAsia Berhard and Fersindo Nusaperkasa one month to report their plan to us. We will cancel the acquisition process if Indonesia is not the majority shareholder," Herry was quoted as saying.

He said the ministry would not hesitate to "revoke Batavia Air's SIUAU (flight permit)".

According to the acquisition plan, AirAsia would own a 49 percent stake in Metro Batavia, while Fersindo would hold the remaining 51 percent in order to comply with Indonesian ownership rules.

Seventy-six percent of the shares are due to be purchased this year and the remainder by 2013.

Herry said, however, that the ownership status of Fersindo, which controls 51 percent of AirAsia's Indonesian subsidiary IAA, remained unclear.

"They will not be able to execute their plan if they do not report clear information to us," he added.

Previously, AirAsia Group's CEO, Tony Fernandez, had said in a statement that the Batavia Air acquisition was a fantastic opportunity for AirAsia to accelerate its growth plans in one of the most exciting aviation markets in Asia; and that it further underlined its belief in the growth potential of Indonesia's aviation sector.