StarLux sets underwriting price at NT$20 for IPO, eyes transit market

Taipei, Oct. 12 (CNA) StarLux Airlines, Taiwan's newest international carrier, has set an underwriting price of NT$20 (US$0.62) per share for its upcoming initial public offering (IPO) on the Taiwan Stock Exchange scheduled for Oct. 25.

StarLux Airlines said at the same time as bringing its shares to the local main board, the carrier is seeking to develop its base in Taiwan into a transit hub for the North America and Southeast Asian markets.

According to the carrier, the underwriting price was set after StarLux Airlines completed a competitive auction of 319.6 million shares from Oct. 4 to Oct. 8 with an auction price range between NT$21.63 and NT$100, resulting in a weighted average auction price of NT$23.28.

Based on the floor auction price of NT$17.39 per share, StarLux Airlines has set an underwriting price of NT$20, which will not top 1.15 times the floor auction price, enabling investors to subscribe for 79.90 million shares next week.

Since Sept. 30, 2022, StarLux Airlines shares have been traded on the emerging market. In Taiwan a company is required to trade its shares on the emerging market for no less than six months before going to the main board or the over-the-counter market.

StarLux Airlines said it is upbeat about Taiwan's potential to extend its reach in the Asia Pacific airline market and use the island's geographic advantage to allow the carrier to provide transit services for the North America and Southeast Asian market.

StarLux launched direct flights between Taipei and Seattle on Aug. 16. The city is the airline's third destination in the U.S., after Los Angeles and San Francisco.

StarLux Chairman Chang Kuo-wei (張國煒) said in September that the carrier is looking to increase flights to L.A. and Seattle, and has also set its sights on other U.S. destinations such as New York, Dallas and Houston.

The carrier said it expects to operate 31 routes to 27 destinations worldwide by the end of this year.

Currently, StarLux Airlines, has a fleet of 24 aircraft which will increase to 26 after the carrier takes delivery of two A350-900s later this year.

The airline said it will continue to introduce more Airbus planes and expects its fleet to expand to 33 by the end of 2025 and reach 53 by the end of 2029.

StarLux Airlines, which was set up on May 2, 2018 and flew its maiden flights in 2020, turned a profit for the first time in 2023, when it posted a net profit of NT$149 million with earnings per share (EPS) at NT$0.08. In the first half of this year, the carrier's EPS stood at NT$0.39, up from NT$0.18 over the same period of last year.

In the third quarter of this year, StarLux posted about NT$9.60 billion in consolidated sales, a new quarterly high and up 58 percent from a year earlier, in a booming tourism market. In addition, robust demand for cargo services to the North American market also boosted its revenue.

According to the carrier, the average load factor -- an industry metric to measure how much of an airline's passenger carrying capacity is used -- hit more than 80 percent in the first eight months of this year.

StarLux Airlines has announced it will apply to join the global airline alliance Oneworld before the end of 2025.

If accepted, StarLux Airlines will work with other airlines in the alliance on flight schedules, passenger transits and frequent flyer programs, the carrier said.

The Oneworld Alliance has 13 members, including American Airlines, British Airways, Cathay Pacific and Qantas, and serves more than 900 destinations in 170 territories.

China Airlines, one of the two leading international carriers in Taiwan, is in the SkyTeam Airline Alliance, while the other, EVA Airways, is a member of Star Alliance.