AirAsia Philippines shelves IPO plans

MANILA, Philippines — AirAsia Philippines has shelved anew its plan to go public, with the company’s stock market debut unlikely to take place in the next two years.

AirAsia Philippines chief executive officer Ricky Isla told The STAR the company’s initial public offering (IPO) may not happen next year, or even the year after. “It is still unlikely next year. Not 2021. Even 2022. When we look at it, it will probably not happen. Let’s be realistic. We have to be very, very realistic. Everyone right now is incurring losses,” Isla said.

The company late last year was eyeing to finally push through with the long-delayed IPO within the third quarter up to the first quarter of 2021, assuming that the market is “robust enough.”

However, the COVID-19 outbreak wreaked havoc on the entire aviation industry beginning early this year.

In a briefing last March, Isla said while the IPO is still in the works, “the more important pressing matter now is to immediately recover so that at the end of the day when we do the IPO, our bottomlines are also doing good.”

Now, Isla said the company needs to go back to ‘’normal’’ as far as its performance is concerned before proceeding with the IPO. “Remember in 2019, we had a good performance in terms of profitability.When you do an IPO, there should be three years of consistent healthy bottomline,” he said.

AirAsia Philippines posted a P2.3 billion net loss in the second quarter, a sharp turnaround from the P353 million net income in the same period last year.

The number of passengers carried by the airline plunged by 99 percent in the second quarter due to the pandemic.

AirAsia Philippines ended the quarter with the resumption of six routes, operating 19 percent of its pre-COVID-19 capacity.

Load factor during the three-month period stood at 55 percent, lower than the 91 percent load factor during the April to June period in 2019.

AirAsia Philippines’s domestic capacity is expected to recover up to 60 percent of its pre-pandemic level in the fourth quarter.

While the company is still not bullish in terms of recovery in the second half, Isla said the company is seeing positive signs.

“We expect to have sufficient liquidity in the second half of 2020 and 2021 as revenue should improve in tandem with rising domestic demand. Our cash flow is managed tightly and we are well prepared to rely on operating domestic sectors in the short term if international travel restrictions continue,” AirAsia Group chief executive officer Tony Fernandes said.