AirAsia X, the long haul subsidiary of the AirAsia Group, plans to raise up to RM859.3 million (US$272.8 million) from its initial pubic offering (IPO) exercise to finance the company’s growth, fund the fleet expansion and repay bank loans.
In its summary prospectus issued on June 10 the airline is offering 790.12 million ordinary sharescomprising an offer for sale of up to 197.53 million existing shares, and a public issue of 592.59 million new shares for between RM1.15 to RM1.45 each.
Proceeds from the IPO will be used to repay debts, for fleet expansion and for capital and listing expenses, said AirAsia X CEO Azran Osman-Rani (pictured below left).
The airline would continue with its expansion in Australia and North Asia through new routes and increased frequencies on existing services.
"We will also be creating hubs for AirAsia X, the most earliest and likely to be in Indonesia and Thailand. We will create new routes from there with aircraft stationed in the hubs," added Azran.
AirAsia X flies to14 destinations across Asia, Australia and the Middle East, and will launch service to Busan in Korea next month. It currently operates a fleet of 10 Airbus A330-300s, and will take delivery of 23 Airbus A330-300 planes over the next four years starting from July.
The long-haul budget airline will make its market debut on the main bourse of Bursa Malaysia (Malaysia Stock Exchange) on July 10. CIMB Investment Bank is the principal advisor for the exercise.
In a related development AirAsia group CEO Tan Sri Tony Fernandes (pictured right) revealed AirAsia X was relooking at reviving the axed routes to India and Europe.
The airline suspended its services from Kuala Lumpur to Mumbai and New Delhi (India) on January 31, 2012 citing high operating costs. It axed the London and Paris services in January 2012.
On India. Fernandes said the growth potential was there. The Kuala Lumpur-New Delhi and Kuala Lumpur-Madras routes could be revived soon, but no further details were revealed.
On London, he said that with the delivery of the Airbus A350-900 aircraft to AirAsia X in the next few years the long-haul carrier might reinstate the London and Paris services but had to be within the framework of the airline's business plans..
Observers said that the reviving of the India routes could be a bid to fend off competition from hybrid carrier, Malindo Air, which is looking at launching international flights to India and Singapore by August.
Malindo Air, which began service on March 22 from the KL International Airport (KLIA) in Sepang. is seen as a threat and direct competitor to AirAsia and Malaysia Airlines with its low fares and offerings of free baggage and inflight meals.
AirAsia has, however, dismissed the airline as a threat saying being the largest low cost carrier in Asia and with a sound balance sheet stand it in good stead against competition.
Currently Malindo Air, a joint venture between Malaysia’s National Aerospace Defence Industries of Malaysia (Nadi) and Indonesia’s Lion Air Group, flies to Kuching (Sarawak) and Kota Kinabalu (Sabah) from KLIA. It also service three domestic destinations - Penang, Johor Bahru (Johor) and Kota Bharu (Kelantan) - from Subang Skypark in Kuala Lumpur.