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AirAsia IPO Aims for Better Market Conditions in 2012
Faisal Maliki Baskoro | December 13, 2011

AirAsia Indonesia expects to increase its passenger load by 15 percent this year to 4.5 million. The parent company plans IPOs for its Thai and Indonesian units beginning in the second quarter of 2012. (Reuters Photo) AirAsia Indonesia expects to increase its passenger load by 15 percent this year to 4.5 million. The parent company plans IPOs for its Thai and Indonesian units beginning in the second quarter of 2012. (Reuters Photo)
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Budget carrier AirAsia has pushed back a planned initial public offering for its Indonesian unit to next year.

AirAsia Indonesia, based in Jakarta, said in July that it wanted to sell shares in an IPO on the Indonesia Stock Exchange in the fourth quarter of this year.

Tony Fernandes, the chief executive officer of Malaysia-based AirAsia, said on Tuesday that the IPOs for the airline’s units in Indonesia and Thailand would go ahead after they gained approval from authorities in the respective countries.

“We always say that the IPO will depend on capital market conditions. We see robust growth in Indonesia and Thailand going into 2012,’’ Fernandes said in a statement.

He said AirAsia’s Thailand unit was in the process of gaining approval from the country’s authorities for an offering in the second quarter of next year, and that AirAsia Indonesia “will follow suit afterwards.”

He did not elaborate.

Dharmadi, CEO of AirAsia Indonesia, said in July that the company hoped to raise up to $200 million from the IPO.

AirAsia Indonesia would be only the second airline to be listed on the Indonesia Stock Exchange. The first was flag carrier Garuda Indonesia, which raised Rp 4.7 trillion ($517 million) in an IPO earlier this year.

Still, rising fuel prices have cut into Garuda Indonesia’s profitability and put a damper on its shares, which are down 32 percent since their debut in February. They lost another 1.2 percent to Rp 420 on Tuesday.

Several brokerages including Nomura Securities in Jakarta have forecast the benchmark Jakarta Composite Index to climb to 4,800 next year, and a rising stock market might encourage investors to buy shares. The JCI has gained 1.6 percent so far this year and is on track to extend last year’s 46 percent rise.

It closed down 0.8 percent on Tuesday at 3,763.58.

AirAsia Indonesia had carried 4.18 million passengers as of October, up 28 percent from the same period last year. The airline expects to carry 4.5 million people this year, which would be a 15 percent increase from last year’s 3.92 million, it said.

The total number of domestic and international passengers in Indonesia rose to 46.4 million as of August this year, according to data from the Central Statistics Agency (BPS). That number could surge to 60 million next year, according to the Indonesian Air Carriers Association (Inaca)

Dharmadi, the AirAsia Indonesia CEO, said in July that the IPO and other moves were in line with the carrier’s ambition to become the No. 1 Asian airline on the back of a series of joint ventures in the region.

To boost its expansion across the region, AirAsia placed an order in June for a record 200 Airbus A320s for $27 billion, which would make AirAsia one of the world’s largest carriers.

AirAsia shares fell 2.1 percent to 3.71 ringgit on the Malaysian stock exchange on Tuesday. They have risen 47 percent this year.