Lion plans to sell stake to public

Lion plans to sell stake to public

Tony Hotland, Jakarta

Domestic budget airline PT Lion Mentari Airline plans to offer
its shares to the public through an initial public offering (IPO)
some time next year as part of its expansion plans.

Lion spokesman Hasyim Arsal Alhabsi said on Wednesday that the
plan had been fully supported by the company's shareholders, but
no specific dates or phases had yet been determined.

"The bottom line is that our shareholders have suggested we
have an IPO since they feel it's about time the public became
part of us, especially now that we're a sound local company,"
Hasyim told The Jakarta Post.

He was quick to add, though, that the plan was still tentative
as there was no urgency yet at present, and gave an assurance
that the company's current cash flow was still healthy.

"The IPO is expected to help make us perform better in the
long term as we're committed to serving the public as well as we
can. Our goal is to become the airline with the lowest fares and
be seen as a quality carrier within Southeast Asia," said Hasyim.

He said that the carrier wished to expand its coverage to more
areas both within and outside the country, especially in eastern
Indonesia.

"We also wish to increase our flight frequency and improve
services, both offboard and onboard," added Hasyim.

According to Hasyim, Lion, which was founded by former travel
agent Rusdi Kirana, currently carries around 500,000 passengers
per month on 50 routes, with the load factor standing at 91
percent to 95 percent.

"Lion Air also plans to launch new flights to more cities
abroad. This year, we expect to add to our routes and fly to Hong
Kong, Guang Zhou (China), India and Australia," he said.

Hasyim added that the IPO would likely be carried out after
the company put into service all of its 15 new aircraft, in
addition to its 24 aircraft. The fleet currently comprises MD-83s
and B 737/300s.

The IPO, if it takes place, will mean Lion will become the
first airline to be listed on the country's stock exchange.

Flying for the first time in June 2000 from Jakarta to
Pontianak, Lion Air was one of the vanguards of the low-cost
airline concept here, which has been booming in the international
market.

Lion's local competitor in the no-frills segment is Garuda
Indonesia's Citylink, while several foreign competitors in the
segment that also serve routes to Indonesia include Malaysia's
Asia Air, Singapore's Tiger Air and Australia's Virgin Blue.

According to data from the Ministry of Communications, the
low-cost airline concept increased the number of domestic
passengers to 16.5 million last year from 12.3 million in 2002.
The number is projected to surge to 20 million this year.