No timeline for AirAsia’s IPO — Fernandes

MANILA, Philippines — AirAsia Group chief executive officer Tony Fernandes does not see the long-planned initial public offering of its Philippine unit happening next year despite earlier indications from local executives of the IPO possibly pushing through by late 2020.

Fernandes said the company does not want to sell itself cheap, so it might have to “wait a bit” before going public.

Asked if he is confident that the IPO would proceed next year as AirAsia Philippines officials are hoping it would, the AirAsia co-founder said no.

Fernandes said there is no target date at the moment as to when the IPO would finally happen.

“I don’t think we can commit to a timeline. Let’s see how results go,” he said.

AirAsia Philippines, which has expressed plans to go public as early as 2015, again deferred its earlier planned IPO this year, saying that it is “still undergoing a restructuring of its corporate organization” and that there are still “a number of things to do on the corporate side.”

However, AirAsia Philippines chairman of the board Jomar Castillo had said last October that the new timeline being eyed by the company for the IPO is by the third quarter next year to first quarter of 2021, assuming that the market is “robust enough.”

The company is eyeing to raise around $200 million from the public listing.

In a press conference in Malaysia last Friday, Fernandes said the company is willing to wait a bit for the IPO until it gets a fair valuation.

“Regarding the IPO, we’re doing so well in the Philippines right? The Philippines has been a problem child for us for a long time. The first few airlines did their best to make sure we didn’t do very well, but we’re now all doing well, which is great,” he said.

“I’ve always said that the Philippines is our diamond in the rough because it sits on the border of China, Korea and Taiwan and is a great connector to the East Coast of America so we’re doing great and I just don’t want to sell ourselves cheap so what will we do? We’ll wait until we get a fair valuation. It’s our first year of good profitability, so we’ll wait a bit,” Fernandes said.

Rep. Michael “Mikee” Romero, whose F&S Holdings serves as the sole local owner of AirAsia Philippines, said the company is targeting a net income of P2 billion this year, a turnaround from previous years’ losses.

He said the budget airline’s profit is expected to hit the $100 million mark in the next couple of years.

In terms of revenues, AirAsia Philippines is expecting a year-on-year growth of 39 percent to P29 billion by yearend.

This is expected to grow to $1 billion by either 2021 or 2022, Romero said.

Fernandes and co-founder Datuk Karmarudin Menarum own 40 percent of AirAsia Inc., operator of AirAsia Philippines, while the remaining 60 percent is owned by the Romero family through F&S Holdings.

The AirAsia Group is the largest low-cost carrier in Asia, servicing the most extensive network of over 135 destinations across all ASEAN countries, Asia, India, Australia, China, Middle East and Hawaii in US.

In the Philippines, AirAsia operates a fleet of 24 aircraft on more than 500 weekly domestic and international flights from its hubs in Manila, Clark, Cebu, and Kalibo.