AirAsia eyes dual HK listing

Passengers wait to check in at AirAsia counters for their flights at Don Muang International Airport in Bangkok, Thailand.[Photo/Agencies]

AirAsia Berhad is studying a dual-listing in Hong Kong as part of its plans to become a pan-Asian low-cost airline player as it also moves toward setting up a joint venture in the Chinese mainland.

The Malaysia-based group is simultaneously looking for more aircraft to meet strong demand in North Asia and elsewhere, people familiar with the matter said on Sunday on the eve of Britain's Farnborough Airshow.

Asia's largest low-cost airline group, which already has affiliates across Southeast Asia, aims to form the venture with the backing of a Chinese State-owned enterprise to help capture traffic from fast-growing secondary and tertiary cities.

Co-founder and Chief Executive Tony Fernandes referred to the potential dual-listing without naming a location and hinted at a potential new aircraft order in remarks posted on his Twitter account on Sunday.

"Looking at more ancillary (revenues), more capacity and dual-listing," he said.

The airline group is talking with Chinese banks and potential shareholders including China Everbright Bank Co, one source said.

Expansion into the world's fastest-growing aviation market comes as China edges toward overtaking mature Western air travel markets, despite recently slowing economic growth.

It also comes as AirAsia rebounds from recent turbulence due to lower oil prices and as Fernandes and his partner put in additional investment and take greater control of the business.

The share price fell sharply in 2015 amid negative reports about its finances, but has rallied sharply since then.

A Hong Kong listing could help raise the company's profile, coming on the heels of the flotation there of aviation leasing company BOC Aviation Ltd, and allow it to raise new capital.

Reporting a nearly sixfold jump in quarterly profit in May, Fernandes said demand from Chinese travelers had recovered.

The airline also sees broad demand in markets like South Korea and Japan and has said it is bullish on India after the country eased regulations on the growth of young airlines.

Fernandes has signaled he aims to make AirAsia a low-cost giant with one-stop connections mainly from its Malaysian base.

"It is a huge business opportunity to use low costs to build another Dubai," a person involved in the plans said, referring to the leading Middle East transport hub.

In mid-June, former senior AirAsia executive Kathleen Tan, seen as one of Fernandes' most trusted executives, rejoined the carrier to head its North Asia operations. This included responsibility for building the airline's market and brand in China, Japan and South Korea.

China contributes nearly 40 percent of the group's revenues, but Fernandes said when appointing Tan that there "is still a lot to do in North Asia, ... an important long-haul market".

Reuters