KUALA LUMPUR - Malaysian long-haul budget airline AirAsia X Tuesday said it is planning an initial public offering next year to fund the acquisition of 27 new Airbus aircraft as it expands its routes.

Chief executive officer Azran Osman-Rani said the airline would become independent of AirAsia, Southeast Asia's biggest budget carrier.

Launched in November 2007, AirAsia X is an affiliate of AirAsia and Virgin Group. AirAsia and AirAsia X have common shareholders, including AirAsia founder and CEO Tony Fernandes.

"The IPO will happen in the middle of next year. It is to fund the purchase of 17 A330s and 10 A340s. We are buying each aircraft for about 400 million ringgit (S$170.33 million)," Azran told reporters.

He declined to say how much the airline plans to raise and who the bankers will be.

Azran said he was optimistic the IPO would get a good response as the aviation outlook for the Asia-Pacific region was bright.

"AirAsia X achieved revenues of 720 million ringgit in 2009 and is projected to exceed 1.0 billion ringgit revenue in 2010, in just its third year of operation. AirAsia X has carried two million guests to date," he said.

The airline has placed an order for 17 A330s and 10 A340s. It currently has eight aircraft and will have 11 by December as it expands its routes to South Korea and Japan.

Azran said it had secured Malaysian regulatory approval to fly to Seoul and Tokyo, adding that it planned to fly to continental Europe next year.

"We are hoping to fly to the two destinations in the fourth quarter in time for the ski season," he said.

Fernandes said the demerger of AirAsia and AirAsia X would allow both airlines to be managed independently.

"AirAsia X will focus on expanding to destinations that are more than four hours of flying time. We will put our capital in AirAsia to expand our operations within four hour destinations."

"Airlines that are successful are airlines that are focused like Singapore Airlines which is a long-haul carrier," he added.

Kamarudin Meranum, AirAsia X chairman, said the listing would allow the carrier "to build back its cash reserves."

"In airline business you need reserves," he said, adding that the "timing for the IPO was right."

AirAsia X now flies to London, Taipei, China (Tianjin, Hangzhou, Chengdu), Australia (Gold Coast, Melbourne, Perth) and India (Mumbai, Delhi).