1-Mar-2011 10:06 AM

AirAsia X' plans for IPO in 2011 on schedule

AirAsia X plans for an IPO in 2011 are running on schedule, although it must receive approval for its route expansion plans from the Malaysian Government (AFP, 28-Feb-2011). CEO Azran Osman-Rani stated uncertainty in the route allocation policy does not make it conducive for the carrier to list, however route allocation was not the most important factor, adding that the equity issue is more prominent (Business Times, 01-Mar-2011). Founder Tony Fernandes said the company may be dual-listed, possibly on a US bourse as well as on the Malaysian stock exchange. The carrier is hoping to increase its revenue of USD426 million (MYR1.3 billion) in 2010 to USD655 million (MYR2 billion) in 2011.

AirAsia X: "One of the factors we have to look at before going for an IPO is the route allocation policy and we have to determine what this is going to be. One of the most important things for us is the issue of equity. The expansion of AirAsia X is inevitable, but getting the money to support the 20 planes that we want to buy is something we have to consider. Investors will say, yes, you are growing, you have planes coming, but where are you flying them to? Our expansion is inevitable, it will come, we'll grow. But getting the money to support the 20 planes (on order) is crucial." CEO, Azran Osman-Rani. Source: Business Times, 01-Mar-2011.

National Economic Council (NEC) member Datuk Seri Chua Soi Lek said the policy on allocation of routes is yet to be brought up at the NEC level. The route policy is one of 12 agendas on the Tourism Steering Committee.

NEC: "I'm sure it will be tabled as soon as possible and I'm sure the government will make a decision in keeping with national interest and not AirAsia or Malaysia Airlines. I don't think that it is true that the government is so protective of MAS as to deny Malaysians the ease of travelling at a cheaper rate and all the convenience of connectivity," Datuk Seri Chua Soi Lek. Source: Business Times, 01-Mar-2011.

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