KUALA LUMPUR, June 11 (Bernama) — In contrast with peers in the local aviation industry, budding hybrid airline, Malindo Air, is not considering a public listing yet.
Malindo Airways Chief Executive Officer Chandran Rama Muthy said the airline does not intend to go public in the next few years as it was optimistic the company’s capital base would remain strong to buffer the airline’s aggressive expansion plan.
He said Malindo Air would like to build a strong track record, network and financial abilities, before planning for any initial public offering (IPO).
“It is very early to talk (about IPO). IPO means we need public money to do something. We are not there yet.
“Our financials are very strong. We have strong support from our stakeholders and the cashflow of the company is also good,” he told Bernama.
As such, Chandran said Malindo Air would only opt for an IPO and listing, when it is necessary.
“We will not talk about IPO or listing until we think Malindo Air needs the money, and at the same time ready, operationally,” he added.
National carrier, Malaysia Airlines was listed on the Kuala Lumpur Stock Exchange (now Bursa Malaysia Securities) in December 1985 while frills-free airline, AirAsia Bhd, was listed in November 2004.
On Monday, AirAsia’s long-haul affiliate, AirAsia X launched its IPO, making it the third local airline to be listed on the local bourse.
AirAsia, a brain child of Tan Sri Tony Fernandes, listed its Thai unit in the Stock Exchange of Thailand and is planning to list its Indonesian operations soon.
Malindo Air, an affiliate of fast-growing Indonesian budget carrier Lion Air, has stirred the Malaysian aviation market by offering competitive fares on hot routes with lucrative perks such as free snacks, luggage allowance and enlarged seat pitches.
While the new player’s entry has sparked a price war between Malaysian-based carriers, the intensifying competition in Malaysia is reported to be part of a wider battle for low-cost carrier dominance between AirAsia Bhd and privately-held Lion Air which has placed huge aircraft orders and planned to use its dominance in Indonesia to expand within Asia.
Lion Air has a 49 per cent stake in Malindo Air with the rest owned by Malaysia’s National Aerospace & Defence Industries Sdn Bhd (NADI).
– BERNAMA
