Malaysian long-haul budget carrier AirAsia X launched an initial public offering on Monday with a value of up to USD$370 million, seeking funds for its fleet expansion as it targets buoyant travel demand in Asia-Pacific and looks to fend off regional rivals.
The carrier, which competes with Singapore Airlines’ Scoot and Qantas Airways’ Jetstar, has said it plans to add 13 Airbus A330 wide-bodied planes this year and next to take its fleet to 23 aircraft by 2014.
The expansion comes as passenger traffic in the Asia-Pacific region more than doubled between 1998 and 2012, putting air travel activity in the region on par with North America, according to figures from research firm Strategic Airport Planning, which were cited in AirAsia X’s preliminary IPO prospectus.
“The focus in on the sweet-spot flights of 4 to 8, or possibly 9 hours,” Tony Fernandes, AirAsia X’s founder, told reporters at the IPO launch. He added that AirAsia X plans to strengthen its position in its key markets in Australia and East Asia.
The company plans to use 33.3 percent of the proceeds to repay bank loans, with another 32.6 percent set for capital expenditure and 29.7 percent as general working capital.
AirAsia X’s chief executive, Azran Osman Rani, said the carrier’s expansion would come through more flights on existing routes as well as from new routes within some countries where it already operates.
The deal is scheduled to be priced on June 24, with the stock market debut set for July 10.
(Reuters)