Malaysia's AirAsia X up 0.79% on market debut

Shares in AirAsia X rose 0.79 percent on their market debut in Malaysia Wednesday as the firm's chief executive promised a spending spree on new planes to boost frequency and target more routes. The carrier was trading at 1.27 Malaysian ringgit in morning Kuala Lumpur trade, up from their initial valuation of 1.25 ringgit and outstripping the wider market, which was up just 0.10 percent. "I think it looks like we priced it right," chief executive Azran Osman-Rani said at a news conference Wednesday. He added that the Malaysia-based carrier would use cash from last month's $308.6 million initial public offering to increase its fleet and seek out new destinations. "Planes, planes, planes. Bigger network, more destinations, more frequencies," Azran said. The carrier, founded by aviation tycoon Tony Fernandes, has said the funds would largely go to tripling its fuel-efficient Airbus fleet from the current 10 aircraft and repay of bank loans. AirAsia X will take delivery of 23 Airbus A330-300 planes over the next four years with a further order for 10 A350-900s as it aggressively expands routes to meet demand in Asia-Pacific. The International Air Transport Association said the region is the world's fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 percent in the past seven years. The airline, launched in 2007, reported a net profit of 33.8 million ringgit ($10.8 million) for the year ended December 31, 2012. Charting an ambitious growth path, AirAsia X plans to increase services to existing destinations and carve out lucrative new routes in Australia, Japan and China. Analysts said the successful listing of the long-haul arm of AirAsia -- Asia's largest budget airline by fleet size -- showed that a low-cost long haul business model was viable. Total demand for the institutional tranche of the public offering was more than 10 times the base shares available, the company said. "Investors may want to pay close attention to this stock because it is one of a handful of airlines in the world that has been innovative and committed to opening new markets," said Shukor Yusof, a Singapore-based aviation analyst with Standard & Poor's. He told AFP that AirAsia X's listing would encourage other regional carriers, such as fast-growing Indonesia-based Lion Air to follow suit. "At this stage, AirAsia X has proven its critics wrong," Shukor said. AirAsia X's relatively successful IPO comes as at a time when several companies in the region have withdrawn from such a move. In June alone, four companies in Hong Kong either dropped IPO plans or cut their their sizes. Ooi Chin Hock, a brokerage dealer with Malaysia's M&A Securities, said AirAsia X's "strong management and credible growth plans" was attracting investors at a time when regional markets are choppy. -- Dow Jones Newswires contributed to this story --