KUALA LUMPUR: As competition in the low-cost sector increases, AirAsia's investor relations efforts have resulted in marked oversubscription for its IPO shares, in advance of its November 22 listing date.
The Malaysian low-cost carrier tapped Golin/Harris Singapore to handle its public and investor relations activities for its forthcoming initial public offering after a competitive pitch, which reportedly included Ogilvy PR Malaysia, and one local agency.
Foreign institutional investors have responded particularly strongly to the share offering, with bids for shares already received over and above the 560 million set aside.
The airline has banked on its high-growth model and relative experience to pitch its IPO, which is expected to signal the first of many in the low-cost market.
"It's always been based on the fact that it's a strong brand and a growth strategy," said Golin/Harris Singapore director Mike Liew. "Everyone asks us about competitors but AirAsia has a two-year headstart over the rest - so it has proven profitable and has proved its model works. Any other competitors coming in have to prove themselves."
Given the strict restrictions surrounding IPO communications, Golin/Harris' role was to ensure Air asia did not overstep regulatory boundaries in dealing with the media, analysts and investors. It also utilised a strategy of third-party research to help pitch AirAsia to these stakeholders.
"The objective is really to manage the communications to ensure they all fall within the guidelines and, of course, the fact that its oversubscribed is the icing on the cake," said Liew.
"Because AirAsia wasn't allowed to speak about the IPO directly, we had to be a bit creative," he continued. "We pitched analyst reports of the whole industry. Because AirAsia has such a great track record, almost every research report that comes out on this industry reflects well on AirAsia."
Golin/Harris' Singapore office worked in tandem with sister agency Weber Shandwick's Kuala Lumpur office, which marked the first time that AirAsia had retained a PR agency.
The IPO approaches as one of AirAsia's newer rivals - Tiger Airways - shook up its own PR brief by calling a pitch upon the expiration of Edelman's project account with the carrier.
Tiger Airways marketing executive Cheryl Ong confirmed that five agencies are in the fray for the business, but refused to comment further. Edelman handled the unveiling of Tiger's livery and the launch of its first flight.
Ong also refuted speculation that the high-profile resignation of Tiger chief executive officer Patrick Gan late last month was linked with the PR review.
The resignation came as the airline - which is 49 per cent-owned by Singapore Airlines - gears up for its commercial launch in two months time.