AirAsia to expand in China, seeks HK listing

AirAsia has sought to be listed on Hong Kong’s stock exchange market, following a move towards establishing a joint venture in China to help create traffic from rapidly growing secondary and tertiary cities.
The expansion comes in light of China heading to overtake the Western aircraft market despite the recent slackening growth of its economy, said sources to Reuters on the eve of Britain’s Farnborough Airshow.
The Malaysian low-cost airline, which already has an hub in Macau (linking the MSAR with several Southeast Asian cities), is currently searching for extra aircraft to meet the strong demand in North Asia and other regions, aiming to collaborate with the backing of a Chinese state-owned enterprise.
AirAsia’s co-founder and chief executive Tony Fernandes said the demand from Chinese travelers has recovered, following an almost six-fold surge in its quarterly revenue in May for the budget-carrier.
Fernandes now plans to use AirAsia’s short-haul and long-
haul flights to connect passengers from North Asia to Southeast Asia and Australia.
Meanwhile sources said a Hong Kong listing could help raise the airline’s profile and will allow for the raising new capital, also revealing that the company’s long term aim is to have a joint venture in either Hong Kong or China.
A Twitter post by Fernandes hinted at the potential dual listing without revealing the location, also implying the possibility of new aircraft.
“Looking at more ancillary [revenues], more capacity and dual listing,” he wrote in his post.
China contributes nearly 40 percent of the group’s revenues. However, Fernandes believes that there “is still a lot to do in North Asia” as it is a significant long-haul market.
The airline’s expansion also contributes to its recovery from the recent turbulence due to low oil prices, and a sharp drop in share price experienced in 2015.
The airline is preparing strategies to meet market demands in Korea and Japan, adding that they are also optimistic about India, as the country has recently eased restrictions on foreign direct investment. LV