PH AirAsia plans to go public in 2017 for fleet expansion

MANILA, Philippines – Philippines AirAsia is moving forward with its plan to be listed on the Philippine Stock Exchange (PSE) this year, as it starts talks with several foreign banks to study the terms of its initial public offering (IPO).

“On the IPO, we’re working on that. We’re starting the discussions with the foreign banks. We hope to do it this year. We are accelerating it,” Philippines AirAsia chief executive officer Dexter Comendador told reporters last week.

The initial plan of the local unit of Asia’s biggest budget carrier AirAsia Berhad was to raise around $200 million through an IPO, but Comendador said this has yet to be finalized.

The local airline wants to increase its fleet to 17 jets this year from the current 14, to accommodate its new operations. By 2032, Comendador said Philippines AirAsia expects to “have around 70 planes.”

Aside from its new 3 flights a week from Clark to Kalibo, the local budget carrier will also resume its Clark to Davao flights 4 times a week on April 22, and add new flights to Davao, Puerto Princesa, and Bohol from Clark, according to Comendador.

For international routes, Philippines AirAsia is looking at connecting Clark International Airport to Taipei, South Korea, and China.

“It is time for Philippines AirAsia to face competition,” Comendador added. (READ: APEC 2015: AirAsia banks on Philippines after first airliner disaster)

Philippines AirAsia operates a fleet of 14 aircraft with domestic and international flights out of hubs in Manila, Cebu, Kalibo, and Clark. It flies to Manila, Davao, Cebu, Kalibo, Tacloban, Tagbilaran, Puerto Princesa, Clark, Shanghai, Taipei, Incheon, Hong Kong, Macau, Kuala Lumpur, Kota Kinabalu, and Singapore.

The Philippines AirAsia CEO also said they want the PSE listing to coincide with the AirAsia group’s listing on the stock exchange of “either Hong Kong or Singapore.”

“What is more exciting really is the IPO of AirAsia group,” Comendador said. “We are expanding. We have around 400 [planes] for the group.”

AirAsia Berhad CEO Tony Fernandes, who transformed a floundering carrier into Asia’s biggest budget airline, faced his first major crisis after an AirAsia plane went missing in 2014.

Asked how the business has been since the tragedy, Fernandes told media when he visited Manila for the Asia-Pacific Economic Cooperation (APEC) Summit in 2015 that his company is optimistic about the Philippines. “[In terms] of passenger traffic, the Philippines is actually the best.”

Although expanding operations here is “challenging,” Fernandes said “there is big prize at the end of the day in the Philippines.” – Rappler.com