KUALA LUMPUR: Shares in AirAsia X rose 1.60 percent on their market debut in Malaysia Wednesday as the firm's chief executive promised a spending spree on new planes to boost frequency and target more routes.

The carrier was trading at RM1.27 after morning Kuala Lumpur trade, up from an initial valuation of RM1.25 and far outstripping the wider market, which was up just 0.17 percent.

"I think it looks like we priced it right," chief executive Azran Osman-Rani said at a news conference.

He added that the Malaysia-based carrier would use cash from last month's US$308.6 million initial public offering to increase its fleet and seek out new destinations.

"Planes, planes, planes. Bigger network, more destinations, more frequencies," Azran said.

The carrier, founded by aviation tycoon Tan Sri Tony Fernandes, has said the funds would largely go to tripling its fuel-efficient Airbus fleet from the current 10 aircraft and repay bank loans.

AirAsia X will take delivery of 23 Airbus A330-300 planes over the next four years with a further order for 10 A350-900s as it aggressively expands routes to meet demand in Asia-Pacific.

The International Air Transport Association said the region is the world's fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 percent in the past seven years.

The airline, launched in 2007, reported a net profit of RM33.8 million (US$10.8 million) for the year ended December 31, 2012.

Charting an ambitious growth path, AirAsia X plans to increase services to existing destinations and carve out lucrative new routes in Australia, Japan and China.

Analysts said the successful listing of the long-haul arm of AirAsia — Asia's largest budget airline by fleet size — showed that a low-cost long-haul business model was viable.

Total demand for the institutional tranche of the public offering was more than 10 times the base shares available, the company said.

"Investors may want to pay close attention to this stock because it is one of a handful of airlines in the world that has been innovative and committed to opening new markets," said Shukor Yusof, a Singapore-based aviation analyst with Standard and Poor's.

He told AFP that AirAsia X's listing would encourage other regional carriers, such as fast-growing Indonesia-based Lion Air to follow suit.

"At this stage, AirAsia X has proven its critics wrong," Shukor said.

The key challenge AirAsia X would face was keeping a lid on fuel costs, which account for about 49 percent of operating costs, he said.

"The main challenge obviously is to rein in costs. Jet fuel price has started to increase due to uncertainties in the Middle East," Shukor added.

AirAsia X's successful IPO comes as at a time when several companies in the region have withdrawn from such a move.

In June alone, four companies in Hong Kong either dropped IPO plans or cut their their sizes.

Ooi Chin Hock, a brokerage dealer with Malaysia's MandA Securities, said AirAsia X's "strong management and credible growth plans" was attracting investors at a time when regional markets are choppy. -- AFP