AirAsia makes solid stock market debut; aircraft purchase imminent
AirAsia makes solid stock market debut; aircraft purchase imminent
Sean Young, Associated Press, Kuala Lumpur
AirAsia Bhd., the first low-cost carrier to be listed in
Southeast Asia, made a solid debut Monday on the Malaysian stock
exchange, while company officials said they'll decide within two
months on plans to acquire 40 new aircraft.
Shares of Asia's best-known budget airline soared soon after
its debut on Bursa Malaysia to 1.45 ringgit (38 U.S. cents) - 25
percent higher than the retail price of its initial public
offering of 1.16 ringgit.
"Whoever believes in our company will be well-rewarded,"
AirAsia Executive Director Kamarudin Meranun told a news
conference.
Kuala Lumpur-based AirAsia, which has been credited with
revolutionizing air travel in the region, will decide in two
months whether its planned purchase of 40 new planes will come
from Boeing Co. or Airbus, with an option to buy 40 more,
Kamarudin said.
The aircraft will bolster expansion plans for AirAsia, which
now serves routes in Malaysia, Indonesia and Thailand, but hopes
to eventually fly to China, India and the Philippines.
Brokers said AirAsia opened strong in heavy trade of 97.5
million shares, as investors believed the company would remain
ahead of its regional competitors. At least nine budget airlines
will be operating in Southeast Asia by the end of 2004.
"We'll be there in the skies of Asia, ahead of our
competitors," said AirAsia Chairman Pahamin Rajab. "We have
entrenched ourselves and made our brand well-known."
AirAsia's initial public offering of 700.5 million shares
raised about 800 million ringgit for the airline and more than
160 million ringgit for private stake holders.
The company, which began operations in early 2002, offered 80
percent of the shares to institutions at a price of 1.25 ringgit
and the rest to retail investors. Institutional investors usually
pay a premium to the final retail price.
AirAsia currently operates 22 planes. It carried 1.8 million
passengers in 2003 and expects 3.2 million passengers this year,
rising to 6 million in 2005.