AirAsia X plans fleet, route expansion with $522m IPO

KUALA LUMPUR, (AFP) - Malaysian long-haul carrier AirAsia X said on Monday it plans use cash from a public listing worth up to US$418 million (S$522 million) to more than triple its Airbus fleet and expand routes to meet demand in Asia-Pacific.

The budget carrier founded by aviation tycoon Tony Fernandes hopes to raise the proceeds in an initial public offering (IPO) ahead of its July 10 debut on the Malaysian bourse.

"The estimated amount based on the 1.45 ringgit (S$0.57) per issue share is between 1.1 billion ringgit and 1.3 billion ringgit," Nazir Razak, head of banking group CIMB which is running the IPO, told reporters after the prospectus launch.

Analysts have said with last month's general election over, investors are looking for a wide range of stocks in Southeast Asia's third largest economy, sparking a fundraising fever in Malaysia.

AirAsia X chief executive Azran Osman Rani said the proceeds from the IPO would finance fleet and route expansion to cement its position in its core markets in Australia and Asia.

The carrier will take delivery of 23 Airbus A330-300 planes over the next four years beginning in July, while it has also placed a firm order for 10 A350-900s.

Detailing the airline's strategy, Azran said it will bolster its position in lucrative markets like Australia, China, Taiwan, Korea and Japan.

It would be followed by adding frequencies to current routes, opening new destinations including to Adelaide in Australia, Nagoya and Fukuoka in Japan and Busan in South Korea.

AirAsia X previously scrapped London flights because of the European debt crisis and focused on serving routes within Asia-Pacific, where sustained economic growth has swelled the middle class.

AirAsia X currently has 10 Airbus A330-300 planes and serves 14 routes across the region, including destinations in Australia, China, Japan and Saudi Arabia.

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