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Tue, Nov 23, 2004 - Page 12 News List

AirAsia soars on debut

INITIAL OFFERING The shares opened strong in heavy trade as investors expect the carrier to remain ahead of regional competitors, analysts said


AirAsia Bhd, the first low-cost carrier to be listed in Southeast Asia, made a solid debut yesterday on the Malaysian stock exchange, while company officials said they'll decide within two months on plans to acquire 40 new aircraft.

Shares of Asia's best-known budget airline soared soon after its debut on Bursa Malaysia to 1.45 ringgit (US$0.38) -- 25 percent higher than the retail price of its initial public offering of 1.16 ringgit.

"Whoever believes in our company will be well-rewarded," AirAsia executive director Kamarudin Meranun told a news conference.

Kuala Lumpur-based AirAsia, which has been credited with revolutionizing air travel in the region, will decide in two months whether its planned purchase of 40 new planes will come from Boeing Co or Airbus, with an option to buy 40 more, Kamarudin said.

The aircraft will bolster expansion plans for AirAsia, which now serves routes in Malaysia, Indonesia and Thailand, but hopes to eventually fly to China, India and the Philippines.

Brokers said AirAsia opened strong in heavy trade of 97.5 million shares, as investors believed the company would remain ahead of its regional competitors. At least nine budget airlines will be operating in Southeast Asia by the end of this year.

"We'll be there in the skies of Asia, ahead of our competitors," said AirAsia Chairman Pahamin Rajab. "We have entrenched ourselves and made our brand well-known."

AirAsia's initial public offering of 700.5 million shares raised about 800 million ringgit for the airline and more than 160 million ringgit for private stake holders.

The company, which began operations in early 2002, offered 80 percent of the shares to institutions at a price of 1.25 ringgit and the rest to retail investors. Institutional investors usually pay a premium to the final retail price.

AirAsia currently operates 22 planes. It carried 1.8 million passengers last year and expects 3.2 million passengers this year, rising to 6 million next year.

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