Tue, Jun 11, 2013 - Page 15 News List

AirAsia X IPO to fund expansion

AFP, KUALA LUMPUR

AirAsia CEO Tony Fernandes, center, poses yesterday with stewardesses at the launch of AirAsia X’s prospectus for initial public offering in Kuala Lumpur, Malaysia.

Photo: EPA

Malaysian long-haul budget carrier AirAsia X yesterday said it plans to use proceeds from a public listing to more than triple its fleet in the next four years to meet demand in the Asia-Pacific region.

AirAsia founder and CEO Tony Fernandes said the long-haul arm of AirAsia Group hopes to raise up to US$277 million in an initial public offering (IPO) ahead of its July 10 debut on Burs Malaysia.

“Complete with our extensive route networks and passenger base, we have one of the lowest-unit cost base of any airline in the world,” he said at the prospectus launch.

AirAsia X currently has 10 Airbus A330-300 planes and serves 14 routes across the region, including destinations in Australia, China, Japan and Saudi Arabia.

It will take delivery of another 23 of the planes over the next four years starting next month, while it has also placed a firm order for 10 A350-900s after that.

In its summary prospectus, AirAsia X said the IPO could raise 859 million ringgit (US$277 million) from the sale of 592.6 million new shares for between 1.15 ringgit to 1.45 ringgit each.

One-third of the funds raised will be used to repay debts, while another third is slated for capital expenditure, with the balance going to working capital and listing expenses.

AirAsia X previously scrapped London flights because of the European debt crisis and focused on serving routes within the Asia-Pacific area, where sustained economic growth has swelled the middle class.

The International Air Transport Association says the region is the world’s fastest-growing, with passenger traffic more than doubling since 1998 despite fuel costs surging 55 percent since 2006.

The association also expects the Asia-Pacific region’s industry size — already level with North America — to grow faster than the global average until 2031.

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