AirAsia X IPO to get boost from post-election investor interest

SINGAPORE — AirAsia X’s initial public offering (IPO) may get a boost now that the Malaysian elections are out of the way and investors, who were nervous about the outcome, are returning to the markets.

That is the view of Mr Azran Osman Rani, the Chief Executive Officer of the low-cost Malaysian carrier whose IPO is tentatively scheduled for July 10.

“It’s almost perfect timing for us that there is a lot more investor interest from those who were on the sidelines pre-election. Once you take out uncertainty, irrespective of the outcome, then you get people who are more willing to come back into the market,” said Mr Azran, who was in town to deliver a talk as part of the Singapore Institute of Management’s CEO Conversation speaker series.

The proceeds of the IPO will be used to support AirAsia X’s growth plans: The carrier is more than doubling its fleet capacity by the end of next year by taking delivery of seven planes this year and another seven next year.

The airline will use the extra capacity to develop markets it already operates in rather than targeting new countries.

“The strategy is to pick a few markets — Australia, China, Taiwan, (South) Korea, Japan — and become market leaders there, both in terms of the number of flights and the destinations that you have,” said Mr Azran.

As a result, AirAsia X does not intend to add any new countries to its route network as it looks to build its presence in places where it is already successful, he said.