* Plans expansion with $14 bln of planes from Boeing
* Secures $1 bln loan to buy 22 planes this year
* Analysts see strong growth potential
(Adds further details, quotes)
By Janeman Latul
JAKARTA, Feb 2 Lion Air, Indonesia's biggest
airline by passenger volume, aims to raise more than $1 billion
in an initial public offering (IPO) in 2012, its chief executive
told Reuters on Wednesday.
The low-cost carrier has ambitious expansion plans, in a
country where an increasing number of IPOs is seen in the next
year, to take advantage of a buoyant capital market.
"We will ... use the IPO money as additional capital for our
company as we have a huge expansion plan, but it doesn't mean we
badly need money. We have all the financing we need through
loans," said founder and CEO Rusdi Kirana.
Lion Air, which flies to a few Southeast Asian cities and
across Indonesia, plans to expand by purchasing 178 planes worth
$14 billion from Boeing Co (BA.N) by 2016.
It has a $1 billion loan to buy 22 planes this year,
including 16 Boeing 737-900s, Kirana said. It expects to fly 20
million people this year, up from 17 million last year, he said.
"They have promising growth ... Looking at our population
and because we're an archipelago, the most ideal transportation
is air," said Alvin Pattisahusiwa, a fund manager in Jakarta at
BNP Paribas Investment Partners, which manages about $3 billion.
If Lion Air could win removal from a European Union list of
carriers banned from operating to the continent, imposed after a
string of Indonesian air disasters, expansion would be boosted.
Analysts say Asian low-cost carriers have bigger expansion
potential compared with established national carriers.
Philippine budget carrier Cebu Air (CEB.PS) raised $538
million in an IPO last October.
Indonesian flag carrier Garuda is set to raise $526 million
in an IPO this month, half the $1.1 billion it targeted, after
foreign investors were put off by pricing that valued it far
higher than regional peers.
Harry Su, head of research at PT Bahana Securities in
Jakarta, said the air penetration rate in Indonesia is only 15
percent in the world's fourth most populous nation.
Airline executives say the Indonesian market is a bright
spot in an industry still struggling to recover from the global
financial crisis, though Mandala Airlines recently suspended
flights because of debt problems.
International air traffic slowed in November, according to
industry body IATA, a sign the global recovery was slowing.
Rising oil prices LCOc1 also pose a threat.
(Additional reporting by Fathiya Dahrul; Writing by Neil
Chatterjee; Editing by David Hulmes)