Philippines AirAsia pushes IPO launch this year

MANILA, Philippines — The Philippine unit of low-cost carrier AirAsia plans to push through with its initial public offering (IPO) this year, driven by the company’s improving performance.

“We’re moving in the right direction,” AirAsia Group CEO Tony Fernandes told reporters on the sidelines of the Tourism Summit 2019.

“The company has been doing very well. We had a big board meeting today which cleared up a lot of issues and we have one more thing to solve with the board and I think we’re ready to do an IPO,” he said.

AirAsia planned to raise as much as $250 million through an IPO in 2018, proceeds of which will be used for the firm’s expansion.

The company, however, deferred its IPO plans last year due to the impact of high fuel prices and the weaker Philippine peso.

“We’ve been saying this for a few years. but we’re getting close to doing it this year,” Fernandes said.

Asked how much the firm is planning to raise this time, Fernandes said it may be “far greater than” the $250 million expected last year.

“Basically the company is doing extremely well, far greater that the numbers we’ve seen in the past,” Fernandes said.

In 2018, Philippine AirAsia Inc. posted a net operating loss of P2.11 billion from a profit of P710 million in 2017 due to high fuel prices and weak peso.

The budget carrier, however, reported a 23 percent increase in the number of passengers it carried in the first quarter of 2019 to 1.97 million as it boosted its capacity by 17 percent to 2.16 million.

“Despite the much higher fuel cost in fiscal year 2018, we still managed to add significant capacity in order to set the group up for a dominant position in 2019,” AirAsia Group Berhad deputy group CEO Bo Lingam said in a statement.

“For this year, we are confident that Thailand, Indonesia and Philippines will make up for fuel cost hike in FY2018…,” Lingam added.