AirAsia X to seek public listing as independent airline

AirAsia X will be spun off into a standalone, publicly traded company with an IPO targeted for the second half of 2011, subject to market conditions, AirAsia Group said yesterday. The long-haul arm was launched in November 2007 "and is now reaching sufficient scale economies to stand on its own instead of relying on services provided by AirAsia," the company stated. AirAsia also will seek separate listings for its Thailand- and Indonesia-based affiliates.

"After more than two years of operation, we have begun to notice some dilution of the AirAsia business model and recognize the need for AirAsia and AirAsia X to remain focused on their respective markets. Nevertheless, we are extremely pleased with how quickly AirAsia X has grown in the two-and-a-half years since its birth," Group Chairman and CEO Tony Fernandes said. The long-haul unit booked a net profit of MYR87 million ($26.1 million) on revenue of MYR720 million last year and is forecast to generate more than MYR1 billion in revenue in 2010, according to the company.

Under the reorganization, AirAsia X "will take over employment" of its own flight crew and ground staff, "as well as its commercial and marketing team." It is completing a MYR100 million rights issue "to achieve financial independence and fund its continued growth," AirAsia said. It will continue to use the AirAsia brand and airasia.com website as part of its 30-year brand license agreement.