AirAsia X announces ambitious expansion plan
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AirAsia X, which on Wednesday made a modest debut on the Malaysia Stock Exchange, is bullish on growth and says it will leverage on its business model to boost investor stock while maintaining standards for its customers.
Chief executive officer Azran Osman Rani said the long-haul low-cost arm of the AirAsia brand would expand quickly, adding aircraft to its fleet and more routes thereafter.
“We started this year with nine A330-300s and two A340-300s. By the end of the year, we would have 17 A330s and another two A340s. Next year, seven additional A330s and the year after, five more. So, you see, it is a very steep growth path,” Azran told reporters after the company’s listing ceremony.
“We also aim to have an edge in terms of fuel-cost unit advantage. Our business is revenue-earning, which is a function of capacity.
“We aim to be the market leader to connect Southeast Asia with North Asia in markets like South Korea, China and Japan; and Australia in the south,” he said.
At its listing yesterday, market reception to AirAsia X shares was subdued. The counter opened at a premium of one sen at 1.26 ringgit with an initial total trading volume of 9.15 million shares, and later closed unchanged at 1.25 ringgit (Bt12.3). Its market capitalisation last stood at 3 billion ringgit.
“We are very happy and we have priced it right. We have reached this level of success since the company started six years ago,” Azran said.
The retail offering was oversubscribed by 3.8 times, while the institutional portion’s demand was more than 10 times the base shares made available, the company said.
A third of its primary initial public offering (IPO) proceeds of about 740.7 million ringgit on the indicative 1.25 ringgit per share will be used for capital expenditure on engineering and aircraft-related equipment and parts, and its planned expansion into new hubs.
