Due Diligence of a Leading Southeast Asian Low Cost Carrier (LCC)
In 2020, a leading Southeast Asian LCC underwent a capital raising exercise, issuing up to USD500M in convertible preferred shares and convertible bonds. Alton was part of the due diligence team for a private investor seeking to invest in the airline.
Leveraging its domain expertise, Alton provided the client with a comprehensive analysis of the target airline with deep dives into market assessment, operational and safety matters, fleet evaluation, business plan review, and assessment of financials. Deliverables were split into two key areas:
Market Assessment and Traffic Forecast: Alton developed scenario-based forecasts for the region using a combination of top-down and bottom-up approaches, and evaluated the airline’s existing business and market positioning against the backdrop of COVID-19 recovery scenarios.
Business Plan, Safety Management, and Fleet Review: Alton assessed the business transformation plan proposed by the airline and its advisors, focusing on the post-COVID-19 environment. Areas of assessment included the review of safety metrics and safety audit reports to identify potential red flags in opreational safety, and the review of the airline’s fleet transitions process and potential financing strategies for future fleet inductions.
Alton addressed the investor’s concerns on both commercial and operational aspects of the target LCC with minimal red flags raised. Further recommendations were provided to the client on additional focus areas of the business to return the carrier to a sustainable growth trajectory in a post-COVID environment.