Malaysia-based low-cost carrier group AirAsia is planning to list its longer haul operation AirAsia X on the stock exchange next year and make the business more independent, so it relies less on the resources of the group.
"AirAsia X is eyeing a public listing in the second half of 2011, subject to market conditions," says AirAsia, which is primarily a short-haul low-cost carrier, whereas AirAsia serves longer routes with Airbus A330s.
It says "AirAsia X is currently completing a 100 million ringgit ($30 million) rights issue exercise to achieve financial independence and fund its continued growth."
"AirAsia X is growing its aircraft fleet by 37.5% to 11 aircraft and expanding its route network in Asia, including India, Korea and Japan, by year-end," it adds.
It says the longer haul operation launched in November 2007 and is now reaching sufficient economies of scale to stand on its own rather than relying on services provided by AirAsia.
"AirAsia X achieved audited revenues of 720 million ringgit in 2009 and is projected to exceed billion ringgit in revenue in 2010."
"It booked a net profit of 87 million ringgit in 2009," it adds.
AirAsia X will continue to use the AirAsia brand and AirAsia's booking engine but "AirAsia X will take over employment of its own wide-body pilots, cabin crew and ground staff as well as its commercial and marketing team."
Investors will benefit because it means shareholders can invest in the long-haul low-cost business model without that investment being lumped in with a short-haul low-cost airline and vice versa, says AirAsia.
The group also says it plans to list in future some of its overseas airlines. AirAsia of Malaysia has large minority stakes in Thai AirAsia, Indonesia AirAsia and Vietnam's VietJet.
"The airline is moving away from consolidating all businesses into a single investment entity towards having separate public-listed entities that give investors clear choices to invest based on geographic and business model."
"Investors may choose to invest in the countries where AirAsia is based - currently including Malaysia, Thailand and Indonesia - and in the short-haul or long-haul business model."
Source: Air Transport Intelligence news
