Asian Spirit defers IPO plan

Asian Spirit has deferred plans to go public with the sale of at least 30 percent of its shares, moving its timetable to 2008 instead of this year, company officials told The STAR.

The company was aiming to become the first airline to directly list its shares in the local stock market. About P300 million is expected to be generated from the public listing.

In postponing its plan to sell equity, Asian Spirit may find itself competing with bigger airlines. Philippine Airlines plans to go public also by 2008, depending on its ability to post three consecutive years of net profit while Gokongwei-owned Cebu Pacific plans to undertake an initial public offering (IPO) either next year or in 2008.

In line with the planned public offering, Asian Spirit plans to seek the approval of the Securities and Exchange Commission (SEC) to increase its authorized capital stock to P1 billion, from the present P300 million.

Asian Spirit got a 25-year congressional franchise in March 2003 but began commercial operations in 1996. It was given five years from the issuance of its legislative franchise in 2003 to go public, or until 2008.

"We decided to postpone our public offering because we believe we are not yet ready," Asian Spirit vice-president for commercial operations Butch Rodriguez told The STAR.

Asian Spirit earlier said it expects revenues to grow by around 20 percent this year to P1.38 billion, brought about by its expansion to additional foreign routes and continued growth in passengers.

The company has been growing its revenues at a rate of about 20 percent yearly. Revenues hit P1.15 billion in 2005 compared to around P900 million in 2004, marking the first year that Asian Spirit hit the P1-billion revenue mark.

The Civil Aeronautics Board (CAB) earlier revoked Pacific East Asia Cargo Airline’s entitlement to fly to Korea and just last week, gave this to Asian Spirit.

The RP-Korea air agreement limits the designation of Philippine carriers that can fly to Korea to only four, namely Philippine Airlines, Cebu Pacific, Air Philippines, and Pacific East Asia. But since Pacific East Asia has not been using its entitlement for the last seven years, Asian Spirit requested last August the transfer of the permit to operate air transport services to Korea.

Rodriquez said the CAB has given Asian Spirit six months to start using this entitlement. "Thus, we plan to launch the services to Korea by the latter part of next month or early January next year," he disclosed. This timetable will also depend on how fast Asian Spirit can get its permit from Korea, the official added.

Asian Spirit will be operating daily flights from Manila to Korea, and will be using Boeing 737-400 170-seater aircraft which it will be leasing. There will also be four flights a week from Davao to Korea starting early next year and three times a week from Clark to Korea.