LCC juggernaut rolls on

by ORIENT AVIATION 

July 1st 2013

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Low-cost carriers (LCCs) have captured 24% of traffic in the Asia-Pacific, up from 1.1% in 2001. What’s more, the spending shows no sign of slowing as carriers continue to raise cash for major fleet expansion.Read More »

AirAsia X: raised $308 million in IPO

AirAsia X, the long-haul budget offshoot of Malaysia’s AirAsia, may have been forced to pull out of Europe because of poor economic conditions, but it hasn’t dulled its appetite for expansion. In an initial public offering last month it raised $308 million, money it will use to more than triple its fleet and expand routes to meet rising demand in the Asia-Pacific.

The carrier sold 25% of its shares,10.6% to individual investors and 14.4% to institutions. The carrier is scheduled to take delivery of 23 A330-300s in the next four years and has ordered 10 A350-9s.

Also in Southeast Asia, Thai Airways International controlled no-frills operator, Nok Air, raised $156.2 million in an IPO in May. It will list on the Stock Exchange of Thailand this month. Bangkok Airways also has announced it plans to list on the Stock Exchange of Thailand this month and will invest IPO proceeds in fleet acquisition and a hangar complex at Suvarnabhumi airport.

Indonesian LCC, Lion Air, which has ordered 201 B737 MAXs, 29 Next Generation B737-900ERs and 234 A320s, in the last 16 months, worth $46.4 billion at list prices, is looking to raise money through an IPO by 2015. 

Indonesian budget carrier, Citilink, the budget subsidiary of Garuda Indonesia, is planning to expand its fleet to 50 planes and sell a 30% stake in an IPO also by 2015.

Meanwhile, Citilink parent, Garuda has begun offering up to $203.5 million in bonds as part of an expansion plan that includes strengthening its fleet.

Garuda president, Emirsyah Satar, said the carrier was on course for a rights issue in the second half of this year. The airline is planning to release a maximum of 10% of its shares. The money will help pay for new aircraft.

The carrier’s fleet will total 139 aircraft by the end of the year and rise to 194 by late 2015.