AirAsia targets to launch IPO in 2017

1 min readDec 15, 20165:52 AM

In this article (4)

AirAsia Philippines, the local arm of Asia’s biggest budget carrier AirAsia Berhad, is ramping up plans to launch an initial public offering in 2017, its chief executive officer Tony Fernandes said.

AirAsia Philippines continues to enjoy strong demand despite seeing a net operating loss of P915 million in the third quarter of this year, Fernandes said.

Bulk of the company’s loss in the period was due to extraordinary costs.

Fernandes aims to move a planned equity sale to raise as much as $200 million from an IPO.

Most proceeds will finance expansion to increase the local unit’s current fleet of 15 Airbus 320s.

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What this means

AirAsia Philippines' push for a 2017 IPO, despite a Q3 operating loss, signals a calculated, aggressive move to finance fleet expansion and seize market share. This mirrors the broader trend of Asian companies, like Vietjet and Chagee Holdings, pursuing regional growth, often funded by capital injections or IPOs. While the Q3 loss might deter some investors, the planned $200 million raise shows confidence in demand and Fernandes's ambition. This puts direct pressure on competitors in Southeast Asia, particularly those eyeing similar expansion into new routes. The primary risk lies in effectively converting new fleet capacity into profitable routes amidst intense competition. Watch for the specific allocation of the $200 million and new route announcements.

Minjun Park · Retail News Asia newsroom

Questions & Answers

What is the primary reason AirAsia Philippines wants to launch an IPO?

The company aims to raise as much as $200 million from the equity sale. Most of these proceeds are intended to finance expansion plans and increase the local unit's current fleet of 15 Airbus 320s.

What financial performance did AirAsia Philippines report in the third quarter of this year?

AirAsia Philippines reported a net operating loss of P915 million in the third quarter of this year. This loss was largely attributed to extraordinary costs incurred during the period.

Who is the chief executive officer of AirAsia Philippines?

The chief executive officer of AirAsia Philippines is Tony Fernandes. He is leading the plans to launch an initial public offering for the local arm of Asia's biggest budget carrier.

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