AirAsia, south-east Asia's largest low-cost airline, is considering seeking a secondary listing in Thailand, its chief executive said yesterday.
Tony Fernandes, founder of the Malaysia-based carrier, said discussions were at an early stage but the listing plan could eventually lead to a merger of the main carrier and its Thai and Indonesian affiliates to create a large Association of Southeast Asian Nations stock.
"Our ideal answer would be to have AirAsia as a dual listing and then put AirAsia Thailand into that dual listing," Mr Fernandes said. "Then we could do that in Indonesia and you would have an Asean stock that is traded on three Asean stock exchanges."
Mr Fernandes said the goal was "to portray that we are not just a Malaysian airline, and that you can buy AirAsia and invest in a company that is operating throughout the Asean region".
AirAsia has a long standing goal of expanding in the 10 country Asean grouping, which has a population of about 580m and a combined economy bigger than India's.
He said AirAsia also had a long-term goal of operating in the Philippines and Vietnam, both of which are also members of Asean.
The airline, which is listed in Kuala Lumpur, has asked CIMB, Malaysia's second largest bank, to advise on the listing.
CIMB has also said it plans to seek a listing on the Thai exchange in the first half of next year, selling as many as 35m shares. If the listing goes ahead, CIMB would become one of the three largest companies on the Thai exchange by market capitalisation.
There has been increasing interest in cross-listings in south-east Asia , not just from companies looking for a deeper investor base, but also from exchanges that hope large dual listings will increase volume and smooth some of the volatility that has plagued them in the past.
Chanitr Charnchainarong, who handles listings for the Stock Exchange of Thailand, said that there had been a strong response since the recent removal of regulatory hurdles blocking dual listings, particularly from regional banks, which see a local listing as a way to get closer to their clients.
"We have been talking to many multinationals for a long time, but they have been reluctant to submit themselves to double regulation. With this dual listing, they don't need to bother with double regulation, we will accept the regulation of their home listing," he said.
Mr Chanitr said he had not had a formal approach from AirAsia.
AirAsia yesterday forecast a further recovery in air travel demand after reporting a profit in the third quarter, helped by higher sales of non-ticket items.
AirAsia booked a net profit of M$130m (US$38.4m) in the July to September quarter, against a loss of M$465.5m for the comparable quarter a year earlier.
Airlines everywhere have struggled as the economic crisis has sapped demand for travel and trade, but budget carriers have largely outperformed the full service sector as passengers seek to cut costs.
AirAsia closed down 2 per cent at M$1.28 in Kuala Lumpur yesterday, while the benchmark FTSE Bursa Malaysia KLCI index fell 0.2 per cent.
