AirAsia to sell new shares to raise up to $143 mln

30 June 2009

KUALA LUMPUR, Malaysia (AP) - Malaysian budget carrier AirAsia plans to sell new shares to raise as much as 500 million ringgit ($143 million) as it expands amid a global downturn, Chief Executive Tony Fernandes said Tuesday.

The airline will appoint bankers soon to sell the stock, which would expand the number of its shares by a fifth, in a share placement expected in the next two months, he told reporters on the sidelines of an investment conference.

"The key is that there is a demand for it.

It will put us in a good position. We will grow our market share and increase our capacity," Fernandes said. He didn't give further details.

Airlines worldwide are reeling from the global economic slump that has choked passenger and cargo traffic.

But AirAsia is increasing its routes and buying new planes, saying it is benefiting as travelers cut costs and downgrade to budget carriers amid the global economic slump.

In the quarter through March, it has expanded capacity by 19 percent as it launched seven new routes. Its net profit in the quarter hit a record 203.2 million ringgit ($57 million), up 26 percent from a year earlier.