Airasia Reiterate IPO Plans for Indonesian Unit

Photo by Airasia

JAKARTA (TheInsiderStories) – Low cost flight carries, Air Asia Indonesia has reiterated it plans to list its shares on the Indonesia Stock Exchange in the fourth quarter of 2017. The company, initial public offering (IPO) plan was earlier shelved in mid-2016.

AirAsia Group CEO and founder Tony Fernandes said, proceedings from the IPO will be used to expand to fund route expansion and to enlarge the airline’s fleet in Indonesia.

There had been reports that Indonesia AirAsia would be merged with sister company Indonesia AirAsia X before listing to solve issues regarding negative equity. It is unclear whether the merger plan is still on the table.

Indonesia AirAsia, He said, plans to sell up to 30 percent of its stake. The Malaysian tycoon explained, Airasia is currently awaiting approval by Indonesia’s Financial Service Authority on the IPO plan.

However, Indonesia AirAsia chief executive Dendy Kurniawan, said the proceeds form IPO will also be used to expand flights to the eastern part on Indonesia like Labuan Bajo in East Nusa Tenggara.

Tony said, AirAsia aim to add two more aircraft by the end of this year from currently operate 22 fleets. He estimating, the airlines we will be able to add six to eight more aircraft by next year. The Jakarta-based airline aims to operate about 40 to 42 Airbus A320 aircraft by the end of 2019.

At the same day, The Ministry of Tourism Republic of Indonesia and AirAsia, has officially unveiled a collaboration to drive tourism efforts in promoting the wonders of Indonesia in Malaysia through the vast connectivity the airline offers across the Indonesian archipelago.

AirAsia Indonesia has added direct flights between Jakarta-Macau this month to lure Chinese tourists to visit Indonesia. The new route will service passengers three times flights per week with low cost carrier Airbus A320s aircrafts that can accommodate 180 passengers. In the next month, the flight is increase to become four times in a week.

“I hope this route will open up for foreign visitors, not only for those from Macau, but also from China mainland,” said Dendy by adding AirAsia has committed to support the government efforts to develop Indonesia tourism by extending its route network and offering services at affordable prices.

Minister of Tourism Arief Yahya commenting the Indonesia Government encourage AirAsia to create more new routes to attract more foreign tourists to flight to Indonesia. Currently, AirAsia Indonesia bring around 25 percent of total foreign tourists in a year.

The government targeted to bring 15 million foreign tourist to visit Indonesia in 2017. The government set target to bring 2 million Chinese tourists this year and 10 million tourists in 2019. (RF)