Saturday, August 21, 2010

AirAsia Plans Thai Listing by 2011

27 May 2010

BANGKOK—Malaysian budget carrier AirAsia Bhd said Wednesday that a dual-listing on the Stock Exchange of Thailand is expected to take place around the end of this year or next year, despite worries over political turmoil that have scared many foreign investors away from Thailand.

"That's always our target and I don't see that changing at the moment," Chief Executive Tony Fernandes said in an interview.

After acquiring a stake in VietJet Aviation recently to brings its brand to Vietnam, the Malaysian carrier isn't working on any more acquisition deals at the moment, Mr. Fernandes said.

The company is looking to increase its hedging position in the short term from around 30% of fuel usage currently hedged. "Anything between $80 and $85, we'd do a hedge," he said.

AirAsia plans to start flying to Maldives this year, while its long-haul affiliate AirAsia X expects to commence services to Seoul and Tokyo from Kuala Lumpur by the end of this year, he said.

Separately, Thai AirAsia, 49% owned by AirAsia, also plans to list on the Thai bourse in the first quarter of next year as part of its fund-raising plan to strengthen its financial position and prepare for expansion, Thai AirAsia Chief Executive Tassapon Bijleveld said.

"We are no longer looking for other financial options like bond issuance or anything, as we're now gearing up toward the listing plan," he said.

Despite the adverse effect on passenger traffic from political unrest in Bangkok in recent months, Thai AirAsia still expects to post more than one billion baht ($30.7 million) in 2010 net profit, thanks in part to robust first-quarter earnings of several hundred million baht.

The Thai firm also expects to achieve its passenger and revenue targets of 6.2 million and 12 billion baht, respectively, set for this year. Traffic volume is projected to bounce in the third and fourth quarters when the political situation improves.

"It's worth noting that the unrest occurs in the low season, so the effect on our traffic isn't that severe. Imagine the same incident happened in the first or the fourth quarter, during the high season, we would be in a much more difficult situation," Mr. Tassapon said.

The Thai budget airline's passenger load factor in May has fallen to around 60% to 65% from around 78% in April and 82% in the first quarter, he said.

Air traffic dropped sharply in recent weeks amid deadly political confrontations that had caused many countries to issue travel warnings against Thailand.

A total of 86 people were killed since major violence in Bangkok broke out on April 10, when the military started clashing with protesters. Troops last week launched a crackdown in the central Bangkok area where anti-government protesters had been camped out since April 3, forcing upmarket shopping malls and five-star hotels to close. The military campaign cleared the area, but dispersing protesters rampaged through the Thai capital, setting fire to landmark buildings and looting shops.

By Phisanu Phromchanya


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