Garuda Indonesia’s IPO may be delayed with the airline yet to submit required documents to the stock market supervisory agency by 14-Jan-2011 (Reuters/Antara News, 12-Jan-2011). The Indonesian Government planned initially to launch the IPO Nov-2010, but delayed it until 2011. The carrier aims to raise up to USD500 million by selling a stake of approximately 36.5%, or 9.3 billion new and existing shares at IDR1000 each, via an initial public offering on 11-Feb-2011. A public expose was conducted on 12-Jan-2011 and a roadshow will commence to Singapore, Hong Kong, the US (Boston and New York) and London to attract investors. The bookbuilding process is still underway based upon investor interest from the roadshow. The government will increase the portion of ownership for local investors in the IPO with state enterprises minister Mustafa Abubakar stating: "If the ratio between local and foreign ownership in Krakatau Steel`s IPO is 60 to 40 in the IPO of PT Garuda the ratio would be 70 to 30."
Garuda's IPO may be delayed again, government to increase portion for local investors
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Refusing to allow SIA and Lufthansa to coordinate prices and schedules in the Indonesia-Europe market may not have a significant impact on the overall SIA-Lufthansa JV. However, it is an unfortunate move by Indonesian authorities to protect Garuda ahead of the airline's potential launch of services to Germany.
Preventing or delaying SIA from launching Jakarta-Sydney has a bigger short term impact as it leaves in place – at least for now – the Garuda and Qantas duopoly in a growing market. SIA has also been temporarily stripped of 19 weekly slot pairs at Jakarta Soekarno-Hatta International Airport, in another related and seemingly protectionist move.
Southeast Asia aviation outlook: passenger growth accelerates, led by Vietnam, Myanmar and Malaysia
Southeast Asia’s aviation market recorded healthy growth in 2016, with passenger traffic expanding faster than the global average across nearly every country in the region. Six of Southeast Asia’s 10 countries had growth in or near the double digits, led by Vietnam and Myanmar. Seven countries had growth equal to, or higher than, in 2015.
Southeast Asia should continue to experience rapid growth in 2017 and beyond. Vietnam and Myanmar will likely again lead the pack in 2017, joined by Malaysia. The Philippines should experience growth of approximately 10% for the third consecutive year, also putting it towards the top of the pack.
However, overcapacity remains a long term concern, pressuring yields and profitability. The average profit margin of the Southeast Asian airline sector significantly lagged the global average in 2016, and this trend will likely continue in 2017.