Analysts are not surprised by low-cost carrier AirAsia Bhd's (5099) plans to list three affiliated airlines separately as the group seeks to ease its financial strain.
The group said yesterday it plans to seek separate listings for AirAsia X, Thai AirAsia and Indonesia AirAsia so that investors can clearly choose to invest on geographic and business models.
Long-haul affiliate AirAsia X may seek an initial public listing as early as the second half of next year.
OSK Research Sdn Bhd aviation analyst Ng Sem Guan said it was just a matter of time before the decision was made for the three airlines to have their own cash flow statements given the heavy capital expenditure needed.
"AirAsia would want AirAsia X to be independent and taken on their own aircraft funding," he said.
Standard & Poor's editorial director Shukor Yusof said that AirAsia's bankers and investors would view the news favourably as they would want it to remain focused.
"Also, the idea is to list and separate the units that may draw negative investor sentiment and weigh down (AirAsia)," he told Business Times yesterday.
The AirAsia group is executing a corporate and organisational restructuring to provide investors with a clearer and more focused business model.
"After more than two years of operation, we have begun to notice some dilution of the AirAsia business model and recognise the need for AirAsia and AirAsia X to remain focused on their respective markets," AirAsia group chief executive officer Datuk Seri Tony Fernandes said in a statement yesterday.
He added that the reorganisation was timely for AirAsia X as it enters its next growth phase, and the arrangement will allow it the financial independence and latitude to develop its own marketing strategy.
AirAsia X will now take over deployment of its own pilots, cabin crew, ground staff, and commercial and marketing team.
The move would enable the airline to pursue its own commercial strategy and better develop its capabilities in long-haul service.
It is currently completing a RM100 million rights issue exercise to achieve financial independence and fund its continued growth.
AirAsia X will see its fleet increase from 8 to 11 planes this year with the launch of more routes, including India, South Korea and Japan, by the end of the year.
"While it continues to capitalise on the strength of the AirAsia brand, website and culture, this separation gives more focus and discipline to AirAsia X's model," Fernandes said.
AirAsia X, launched in November 2007, posted a net profit of RM87 million against revenue of RM720 million in financial year 2009. It aims to exceed RM1 billion revenue this year.
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Source : Btimes
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