SOUTH-east Asia’s LCCs could raise as much as US$750 million in total through initial public offerings (IPOs) this year, predicted Malayan Banking’s investment bank.
According to a report by Bloomberg, Thai Airways International-backed Nok Air, Bangkok Airways, Indonesia AirAsia and AirAsia X are preparing to be listed on the market.
Maybank Kim Eng’s CEO, Tengku Zafrul Tengku Abdul Aziz, made the estimate in an email to the news agency, marking the biggest year for IPO deals since 2010.
He said LCCs were the “biggest beneficiaries of the growth in air travel” and “tend to enjoy premium valuations when compared to legacy full-service carriers”.
“Asia is the fastest growing market for air travel globally,” he added. “Airlines in Asia are seen as offering better returns, and hence investors across the globe have a strong appetite for listings out of Asia.”
The same Bloomberg report stated that carriers were betting growth potential in Asia would be enough to convince investors to overlook share declines by other LCCs that have gone public.
Tiger Airways and Cebu Air sold shares in 2010, only to lose steam and share price over time – Tiger shares have tumbled 51 per cent since its January listing in Singapore that year, while Cebu has dropped 47 per cent since its Manila debut in October 2010.
