Indonesia AirAsia Set to Raise $200m from IPO

Tri Listiyarini March 06, 2012

http://www.thejakartaglobe.com/business/indonesia-airasia-set-to-raise-200m-from-ipo/502892

The Indonesian unit of Asia’s biggest budget carrier AirAsia hopes to raise up to $200 million by selling a 20 percent stake in an initial public offering later this year, a top executive said.

The plan comes at a time when competition is growing within Indonesia’s aviation sector.

Lion Air is going through a massive expansion backed by a major fleet purchase, and Garuda Indonesia is setting ambitious growth targets for its budget offshoot Citilink.

Speaking at Soekarno-Hatta International Airport on Tuesday, Indonesia AirAsia president director Dharmadi said he was confident that in the second quarter of the year, “the market will be conducive to list on the local stock market.”

“Proceeds from the IPO will be used to finance the purchase of new aircraft and the implementation of our expansion plans,’’ he added.

The planned IPO will make AirAsia the second airline operator to be listed on the Indonesian stock market, after Garuda went public last year.

Dharmadi said the company had appointed CIMB Securities Indonesia and Credit Suisse to help arrange the IPO.

He added that the company met the local requirement for an airline operator to have at least five aircraft of its own.

The airline expects to operate a fleet of 34 Airbus A320s by the end of 2015.

The company, which currently operates 17 Airbus craft, expects to receive four more later this year.

IAA has carried 20 million people since its establishment in 2005, Dharmadi said.

To mark the implementation of the single-fleet policy — in which it only operates A320s — the carrier is offering heavily discounted fares to several destinations in the region.

For example, the airline is offering tickets to fly from Medan to Kuala Lumpur for Rp 49,000 ($5.40), from Medan to Penang for Rp 99,000 and from Medan to Bangkok for Rp 199,000.

The Malaysia-based AirAsia opened its regional headquarters in Jakarta last October in order to tap into Southeast Asia’s largest market and extend its reach in the region.

The airline’s 2010 full-year net profit reached 1.07 billion ringgit ($353.7 million), nearly double that of 2009. Its Indonesian arm carried 5 million passengers and posted a revenue of Rp 3.8 trillion in 2011, Dharmadi said.

The airline carried 3.78 million passengers in 2010, the president director said, adding that the airline would expand its reach in the country.