Thai AirAsia Plans to Go Public

SINGAPORE ~ The Thai wing of Malaysian budget carrier AirAsia plans a future listing on the stock market, its chief executive said this week, as he announced an expanded service from Singapore to Phuket.

Thai AirAsia boss Tassapon Bijleveld said the airline needs to raise money to repay US$40 million it borrowed to buy back a 50-percent stake in the carrier previously owned, indirectly, by Singapore’s state-linked investment firm Temasek Holdings.

Temasek had gained control of the Thai AirAsia stake after it bought Shin Corp from the family of then Thai prime minister Thaksin Shinawatra in January 2006 for $1.9 billion.

The tax-free purchase sparked a scandal that triggered mass protests against Thaksin, and culminated in his overthrow in a bloodless military coup in September last year.

Bijleveld said Thai AirAsia borrowed money to buy back the 50-percent stake Temasek owned through Shin Corp so that majority ownership of the budget carrier would revert to Thai hands.

With Bijleveld holding one percent of the airline, Thai ownership is now 51 percent, in line with a law requiring majority control by Thais. Thai AirAsia’s Malaysia-based parent firm, founded by tycoon Tony Fernandes, owns 49 percent.

“We do have to go for an IPO. It’s definite,” Bijleveld told a news conference on Tuesday. “We have been caught in the political (turmoil) … there was very little room for us (to maneuver) so we decided to buy over shares,” he said.

Bijleveld also said Thai AirAsia would start services between Singapore and the Thai resort island of Phuket from November 5, adding to its existing Singapore-Bangkok flights.

Thai AirAsia is offering 5,000 seats at a promotional fare starting from S$1 ($1.47) for passengers who book between October 10 and 21. The fare excludes taxes and other fees.

The new Phuket service will compete against two other Singapore-based budget carriers, backed by Singapore Airlines and Australian flag carrier Qantas.

Bijleveld said he hopes Thai AirAsia, which already flies from Bangkok to Macau, will add a Bangkok-Hong Kong service in December as it further expands into China.

The airline is also trying to get the rights to fly from the Thai capital to Vietnam’s Ho Chin Minh City to add to its Bangkok-Hanoi service, he said.

It plans to acquire a total 40 brand new Airbus A320 planes by 2013 as it replaces its current fleet of 14 Boeing aircraft.

Southeast Asia’s low-cost sector has boomed since the birth of Malaysia-based AirAsia almost six years ago spawned a host of imitators.

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