AirAsia X, the long-haul arm of Malaysian budget carrier AirAsia, has launched an initial public offering to raise up to $370 million.

The carrier is seeking funds for fleet expansion as it targets buoyant travel demand in Asia-Pacific and looks to step up competition with regional rivals.

The airline, which competes with Singapore Airlines’ Scoot and Qantas Airways’ Jetstar, plans to add 13 Airbus A330s this year and take its fleet to 23 aircraft by 2014.

Founder Tony Fernandes said the listing of AirAsia X indicated that it had been a success, adding that the carrier planned to expand its operations further.

“AirAsia X’s unique proposition lies in their competitive fares and early-mover advantage,” he said.

“We are expanding our group further and this is just the tip of the iceberg.

“The focus in on the sweet-spot flights of 4 to 8, or possibly 9 hours,” he said, indicating that AirAsia X plans to strengthen its position in its key markets in Australia and East Asia.