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6 July 2020 (closed)
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One of the world’s largest budget carriers, Malaysia-based AirAsia Group, plans to list its Indonesian unit - Indonesia AirAsia - on the Indonesia Stock Exchange in mid-2016. AirAsia Group Chief Tony Fernandes said that the group is eager to expand its presence in Indonesia, one of the world’s fastest growing regions in terms of air passengers, and aims to raise USD $300 million through this initial public offering (IPO). The fatal crash of Indonesia AirAsia flight QZ8501 in the Java Sea in December 2014 did not dim the group’s ambitions.
On the sidelines of the World Economic Forum on East Asia, which is currently being held in Jakarta, Fernandes said that there is room for further growth for AirAsia in Indonesia as President Joko Widodo targets to boost the domestic tourism sector. By 2019 Widodo aims to welcome 20 million foreign tourists per year (from 9.4 million tourists in 2014). As such, AirAsia and Indonesia can grow together. Low-cost carriers have grown significantly over the past decade. In 2003 these low-cost carriers only accounted for five percent of total seats in Southeast Asia. This figure has risen to over 50 percent in 2015.
Currently, Malaysia-based AirAsia owns a 49 percent stake in Indonesia AirAsia. In next year’s IPO AirAsia plans to sell a 20 to 30 percent stake.
Although Fernandes is optimistic about business expansion in Indonesia, the AirAsia Chief has criticized several recent government policies of Indonesia in the aviation industry. For example, the recent new floor price regulation means that ticket prices for domestic routes had to be raised by up to 100 percent. The government introduced this regulation in an effort to safeguard safety standards amid airlines’ price competition. However, it resulted in the seemingly paradoxical situation that some international routes are cheaper than domestic routes. Other criticism was directed at Indonesia's high passenger service charge and high airport taxes.
Indonesia AirAsia flight QZ8501 crashed in the Java Sea on 28 December 2014 en route from Surabaya (East Java) to Singapore, killing all 162 people on board. The crash was the second-deadliest crash in Indonesian territory, after Garuda Indonesia Flight 152 in 1997. The Indonesia AirAsia flight QZ8501 crash was also AirAsia Group's first fatal accident in the group’s 18-year history.
Indonesia AirAsia was established in December 2004 by merging AirAsia International Ltd and Awair International (a local Indonesian airline). Currently Indonesia Air Asia serves flights through its five hubs in Jakarta, Bandung, Surabaya (all on Java), Bali and Medan (Sumatra). Over the past ten years, the airline has carried more than 40 million passengers. It operates 33 routes, consisting of 21 international routes and 12 domestic ones.
The AirAsia Group also plans to list its Philippine unit on the local Philippine stock exchange next year.