This case, AirAsia Malaysia: The IPO Decision, presents the situation faced by Tony Fernandes, the CEO of AirAsia Sdn Bhd (AAB), when he and his team of senior managers had to decide whether they should raise funds through an Initial Public Offer (IPO) or through Private Equity. His airline started operations in January 2002 and became debt-free within eight months of its operations. It earned a net profit of RM 49 million on a revenue of RM 392.7 million in 2004. AAB planned to buy planes and augment its fleet of 17 aircraft. He wanted to replicate his low-cost model in other countries. In November 2003, he entered into a collaboration with Shin Corporation of Thailand to start a budget carrier there. The team needed RM 800 million to buy more aircraft to expand its business. Going public would mean greater administrative burden on the small team of managers. Alternatively, he could opt for private placement and raise funds. This would mean control in the hands of a few as opposed to diffused control in the case of a public offer. In the context of the above, he was wondering what to do.