Soekarno Hatta International Airport has been accommodating an additional 40 flights per day over the holiday season. (JG Photo/Fajrin Raharjo)

Sriwijaya Air Plans to Sell 25% Shares in March 2017 IPO

BY :SARAH YUNIARNI

NOVEMBER 10, 2016

Jakarta. Airline operator Sriwijaya Air will sell 25 percent of its enlarged capital in its planned initial public offering, slated for March, to purchase more medium- and long-range jets to expand the company's overseas operations.

Sriwijaya Air now serves 46 domestic routes and seven international routes in Southeast Asia with 51 being Boeing narrow-body jets: the 737 900ER, 737 800NG, 737-300 and 737-500.

"The IPO's proceeds will be allocated to buy 15 narrow-body jets and two wide-body fleet," Sriwijaya Air president director Chandra Lie said on Wednesday (9/11).

He did not disclose how much the company expects to raise in the IPO.

The last time an airline went public in Indonesia was flagship carrier Garuda in 2011, raising Rp 3.3 trillion ($250 million) after selling a 26 percent in its underwhelming IPO.

Lion Mentari Airlines, the company behind Indonesia's largest budget airline, has been mulling an IPO for two years but it is yet to announce a definitive plan.

Meanwhile, Sriwijaya has booked solid profits for the last three years, boosting company confidence in adding additional domestic and international routes, Chandra said.

The airline plans to use new narrow-body fleets to cater to passengers on domestic and China-bound routes, while the wide-body fleets is dedicated for the Jakarta-Jeddah direct flight from February.

"We still use the narrow-body fleet to cater to passengers during the Umrah, as we are still waiting on the delivery of the fleet," added Chandra.

The new domestic routes include Banyuwangi-Jakarta, Yogyakarta-Lampung, Denpasar- Bima-Lombok, Denpasar-Tambulaka, Yogyakarta-Palembang, Silangit-Batam, and Silangit-Medan.

Sriwijaya will move administration and operational activities to the Cengkareng Business City complex from its current base at the Soekarno Hatta airport.

Chandra Lie founded Sriwijaya Air with his brother Hendry Lie in 2003. Today, the airline is the third largest in Indonesia, holding about a 10th of the domestic air passenger transport market share and carries more than 800,000 passengers per month.

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