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July 30, 2009

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Spring Airlines plans 100 planes by 2015

SPRING Airlines, China's first budget carrier, plans to float shares on the Shanghai market in the second half of next year to finance the expansion of its fleet.

The private carrier aims to run 100 airplanes by 2015 from its current 13 Airbus320 jets, with 30 airplanes purchased, said its Chairman Wang Zhenghua at a news conference in Shanghai yesterday to celebrate its fourth anniversary. "We are now choosing underwriters to help us launch an initial public offering on the main board in Shanghai," he said.

The carrier hasn't decided the size of fundraising, but Citibank, previously a potential underwriter for the carrier, said in 2006 that the market value for the IPO would reach 8 billion yuan (US$1.17 billion).

Fast introduction of new airplanes also keeps pace with the carrier's expansion of overseas routes. Spring Air announced yesterday it got approval from the Civil Aviation Administration of China last week to fly to new destinations near the Chinese mainland, including Hong Kong, Macau, Taiwan, Japan, Korea and Southeast Asia.

"We are still working out routes to link these new destinations and overseas routes will be launched ahead of the 2010 Shanghai World Expo," Wang said. He said in 2007 that Spring Air's profit for this year would exceed 70 million yuan.

In the first half of this year, the carrier has already made 41.17 million yuan in profit, a rise of 200 percent from a year earlier, and delivered 1.62 million passengers, growing 40 percent on a yearly basis. "The domestic aviation industry will boom in the second half of this year, especially from July to October," Wang said.


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