Southeast Asia’s biggest budget carrier AirAsia plans to list on the Thai and Indonesian stock exchanges in a bid to tap the region’s capital markets, despite a turbulent year for airlines.
AirAsia has the most extensive network in Southeast Asia, with more than 70 destinations across 20 countries — and has grown dramatically from just two planes to its current fleet of 85 in just seven years.
Now the company, which is listed only in Malaysia, wants to list itself and its Thai affiliate in Thailand. It also wants to list its Indonesian affiliate in Indonesia.
PHOTO: AFP
Group chief executive Tony Fernandes said the moves would give it more of a Southeast Asian identity.
“We are an ASEAN company. We want many ASEAN investors to buy our shares,” he said over the weekend in Kuala Lumpur.
AirAsia is a big capital stock on the Malaysian bourse.
“By listing on the three stock exchanges, it will boost AirAsia’s ASEAN identity,” he said.
Indonesia is Southeast Asia’s most populous nation, while Thailand and Malaysia are key members of ASEAN.
Fernandes said he was unable to say when the listings would take place as the plan was still in its infancy, but was confident there would be demand for the shares, despite the industry’s problems during the global economic downturn.
“The timing is great in Asia. And Southeast Asia is a huge market,” he said of the region’s 550 million people.
Yeah Kim Leng (姚金龍), chief economist with ratings agency RAM Holdings, in Malaysia, said the listing of AirAsia on the Thai bourse would allow Fernandes to “raise capital and to reduce overall gearing.”
Listing the affiliates, Thai AirAsia and Indonesia AirAsia, would also add fresh dynamism to the capital markets in Thailand and Indonesia and “will enable local investors to participate in the growth potential of the company,” he said.
Fernandes said AirAsia had picked CIMB Investment Bank Bhd, a unit of Malaysia’s second largest bank CIMB Group Holdings, as lead arranger for the stock listings.
AirAsia’s listing plans come just days after CIMB Group Holdings announced it plans to list on the Thai stock exchange in the first half of next year.
On the outlook for the aviation industry, Fernandes said AirAsia was in better shape than many of its competitors.
“We will press ahead with our route expansion. For instance, we will continue to expand into India. The whole Indian subcontinent is an exciting region for AirAsia,” he said.
AirAsia, which services more than 130 routes, already flies to Kolkata, Trichy, Kochi and Trivandrum, India.
While premium carriers have suffered, Fernandes said low-cost carriers have been more resilient in weathering the economic downturn.
“Passenger demand for AirAsia seats remained strong. We will weather the storm very well. Our demand for fourth quarter is good,” he said.
AirAsia’s net profit in the three months to September climbed to 130.07 million ringgit (US$38.4 million) from a loss of 465.53 million ringgit a year ago.
Andrew Herdman, director-general of the Association of Asia Pacific Airlines (AAPA), said the first 10 months of this year “has been one of the most difficult and challenging for airlines in the history of aviation.”
During the period, AAPA international passenger numbers were down by 8.2 percent, while air cargo experienced a 16.5 percent decline. Herdman said the industry has to steer a difficult course over the next year.
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