AirAsiaX plans huge fleet expansion with IPO

Malaysian long-haul budget carrier AirAsia X said Monday it plans to use proceeds from a public listing to more than triple its fleet in the next four years to meet demand in Asia-Pacific. Aviation tycoon Tony Fernandes said the long-haul arm of budget giant AirAsia hopes to raise up to US$277 million in an initial public offering (IPO) ahead of its July 10 debut on the Malaysian bourse. \"Complete with our extensive route networks and passenger base, we have one of the lowest-unit cost base of any airline in the world,\" the AirAsia founder said at the prospectus launch. AirAsia X currently has 10 Airbus A330-300 planes and serves 14 routes across the region, including destinations in Australia, China, Japan and Saudi Arabia. It will take delivery of another 23 of the planes over the next four years beginning in July, while it has also placed a firm order for 10 A350-900s beyond that. In its summary prospectus, AirAsia X said the IPO could raise RM859 million (US$277 million) from sale of 592.6 million new shares for between 1.15 to 1.45 ringgit each. A third of the funds raised will be used to repay debt while another third is slated for capital expenditure, with the balance going to working capital and listing expenses. AirAsia X previously scrapped London flights because of the European debt crisis and focused on serving routes within Asia-Pacific, where sustained economic growth has swelled the middle class. The International Air Transport Association (IATA) has described Asia-Pacific as the world\'s fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 percent since 2006. IATA also forecasts the region\'s industry size -- already level with North America -- to grow faster than the global average until 2031.