SHAREHOLDERS of budget-carrier operator Philippines AirAsia Inc. are infusing more money into the airline for next year, increasing the firm’s capital stock to P5 billion to finance the lease of five more aircraft for 2016.
Over lunch on Tuesday, Philippines AirAsia CEO Joy D. Caneba said her carrier’s board has approved a capital infusion of up to P3 billion for 2016, an amount that will be used for the route and fleet expansion programs of the budget carrier.
“The stockholders have approved a capital increase of up to P5 billion for next year,” she said.
“The capital call is within the existing shareholders only. But we welcome new investors.”
Currently, the company has a capital of P2 billion.
“I think by the first quarter of next year, the new capital will be in place, but we will have it in tranches. I don’t see all the additional increase will come in one tranche, but it will be sufficient to cover the growth expansion for next year,” she said.
The company will take delivery of five new A320s by next year, all leased by its parent company in Malaysia, AirAsia Bhd. All of these will be used for the carrier’s regional expansion to China and South Korea.
“China and the Philippines is a natural route combination, and the yield for that market is doing good. Our market in China is doing very, very well, too. We also plan to open Taipei on top of our Macau and Hong Kong flights,” Caneba said.
The carrier has also retired three of its planes, as the management aligns the image of the the Filipino carrier with its Malaysian parent.
It started operating with 12 planes—from 15 aircraft in January—this month.
With this, operations on certain routes will have to be lessened, thus, Caneba expects to stay in the red for this year.
This also pulls down Philippines AirAsia’s plan of conducting an initial public offering (IPO) by 2017.
“The IPO will definitely happen, but I think we will have to defer it to 2018 because refleeting set us back,” she said.
The company aims to raise as much as $200 million through its stock-exchange debut. It plans to have a public float of about 30 percent. “It’s a primary issuance,” Caneba added. “The IPO will be in the first quarter of 2018.”
Philippines AirAsia used to operate with two air operators certificate—one for AirAsia Zest and another for AirAsia Philippines.
Just recently, the Civil Aeronautics Board approved its petition to operate as a single company with just a single certificate.
The Securities and Exchange Commission issued a certificate approving the name Philippines AirAsia Inc. “doing business under the name and style of the AirAsia Berhad.”
The airline, considered as the third small player in the Philippine aviation market, operates out of Manila, Cebu and Kalibo.