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AirAsia considering IPO for Indonesia unit, undeterred by crash
[SYDNEY] AirAsia Bhd, Asia's largest budget carrier, is still considering an initial public offering for its Indonesia affiliate, whose Flight 8501 crashed and killed 162 people on board in December.
An IPO will make the airline more transparent, Tony Fernandes, chief executive officer of AirAsia Group, said in Sydney today. The comment comes after the Malaysian Reserve newspaper reported in July that the offer was scrapped because of poor financial results.
"In light of QZ8501, the IPO approach also appeals to us because it makes the airline more transparent," Mr Fernandes said. "We're keeping all options open." The Airbus Group NV A320 plane disappeared from radar screens en route to Singapore from Surabaya, Indonesia on Dec 28, after the pilot sought permission to climb to a higher altitude because of thunder clouds. The search for bodies from Flight 8501 is expected to end in about seven to 10 days, Mr Fernandes said. About 60 bodies, including that of the captain, hasn't been recovered yet, he said.
"This is not something obviously that can go on indefinitely, but it's important for us that the families are agreed on this," Mr Fernandes said. "Until we get the investigation results we don't know what went wrong." Flight 8501 climbed more than 5,000 feet (1,500 meters) in less than 30 seconds, rising above the altitude where it was authorised to fly, Ertata Lananggalih, an investigator with Indonesia's National Transportation Safety Committee, said in Jakarta in January.
Indonesia won't release a preliminary report on its investigation into Flight 8501 because fact-findings could change rapidly, Tatang Kurniadi, head of the committee, said in January. Indonesia sent the preliminary findings to all countries in the investigation on Jan 28, he said.
Mr Fernandes said it's too soon to consider an IPO for its India subsidiary. Malaysia-based AirAsia has bases in Indonesia, Philippines, India, Thailand and Japan as economic growth in the region enables more people to fly.
In Japan, AirAsia had looked at leases on A330s that Skymark Airlines Inc is considering transferring after filing for bankruptcy protection in January. AirAsia had also considered joining investors looking to support the airline's exit from bankruptcy.
"We're not big believers in acquisition, we believe in organic growth," Mr Fernandes said, "but we'll take a look."