Spring Airlines firms up plans for IPO

Chinese budget carrier Spring Airlines has firmed-up plans for an initial public offering (IPO) in the first quarter of 2012. Pending approval from the China Securities Regulatory Commission, the stock market regulator, the airline will be listed on the Shanghai Stock Exchange. It hopes to raise US$1.2 billion to help fund new aircraft acquisitions.

2nd Sep 2011


Spring Airlines firms up plans for IPO

Chinese budget carrier Spring Airlines has firmed-up plans for an initial public offering (IPO) in the first quarter of 2012.

Pending approval from the China Securities Regulatory Commission, the stock market regulator, the airline will be listed on the Shanghai Stock Exchange. It hopes to raise US$1.2 billion to help fund new aircraft acquisitions.

If the carrier, which is based at Shanghai Hongqiao International Airport, secures the approval, it will become China’s fifth listed airline. The others are Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines.

Spring Airlines, which operates 24 Airbus A320 aircraft, says it hopes to double its fleet by 2015. It has moderated its previously stated goal of expanding to 100 aircraft.

According to Spring Airlines President Wang Zhenghua, the carrier’s expansion has been disrupted by the rapid expansion of bullet-train services, which are designed to carry 80 million passengers a year. In addition, a shortage of qualified pilots, which is affecting all Chinese carriers, means the airline is unable to expand its domestic network as fast it would like, Wang says.

According to the airline chief, the Beijing-Shanghai high-speed train service will badly affect airlines operating on the route. Eight carriers operate a total of 38 daily services between the key Chinese cities.

Spring Airlines operates to 23 domestic and three international destinations, including Hong Kong, Macau and Ibaraki in Japan. It plans to introduce flights to South Korea and South-East Asia, as well as penetrating the Japanese market further with the acquisition of new aircraft.

The International Air Transport Association (IATA) said in February that there would probably be 800 million new travellers a year by 2014, 181 million of which will be from China’s booming domestic market. Another 33 million will be flying on international routes to or from China.

Spring Airlines, a wholly-owned subsidiary of Shanghai Spring International Travel Service, turned a profit of 470 million yuan (US$73.7 million) in 2010. The carrier was founded in May 2004 and began operations in July 2005.

 

 

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