Spring Airlines’ stock debut soars
Print Edition
SPRING Airlines became China’s first budget carrier to list after its initial public offering of 2.5 billion yuan (US$409 million) on the Shanghai Stock Exchange yesterday.
The airline jumped by the 44 percent limit on its first day of trading to close at 26.15 yuan from its issue price of 18.16 yuan.
The company said in its IPO prospectus that it planned to raise funds to buy nine new Airbus A320 aircraft as well as three new flight simulators.
Industry observers said the stock price of Spring Airlines is much higher than those of state-owned airlines, including Air China and China Eastern Airlines, indicating the carrier’s stronger profitability.
The airline reported a net profit of 270 million yuan in the first half of 2014 amid a tough year for the civil aviation market. Experts estimated its annual profit would rise above 10 percent in 2014.
The Shanghai-based firm is one of the first private airlines in China. Its initiators include Shanghai Spring International Travel Service Co, Shanghai Charter Airplanes Travel Service Co, Shanghai Chunxiang Investment Co, and Shanghai Chunyi Investment Co.
Budget airlines in China constitute under 5 percent of the country’s total civil aviation market, which boasts a big demand for low-cost airlines.
In addition to operating regional lines, Spring Airlines launched a direct air route between Wuhan, capital of Hubei Province, and Osaka in west Japan in July.
It has announced plans to fly to the Maldives, Tokyo, Moscow and Melbourne in future.
Spring Airlines aims to compete with international budget carriers, said Zhang Wu’an, the carrier spokesman.
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