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Spring Airlines welcomes Airbus purchase
By Winny Wang |
March 30, 2009, Monday
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Online Edition
Online Edition
CHINA'S first budget carrier Spring Airlines received its first purchased A320 jet from Airbus today with 15 more to be delivered within three years to expand its network globally.
The Shanghai-based carrier has ordered 16 A320 jets, at a cost of 6 billion yuan (US877 million), with support from the financial leasing arm of Industrial and Commercial Bank of China., China Construction Bank and HSH Nordbank AG.
It will receive the other 15 jets within three years and the first A320 jet will serve on routes between Shanghai and Lanzhou, Urumqi, Zhangjiajie, Guiyang and Hainan. The carrier operated 11 rental A320 jets before the first purchased jet was delivered.
"The asset-to-debt ratio of Spring Airlines is about 40 percent to 50 percent, much lower than the average level in the aviation industry, so we have adequate cash flow to support the expansion of the fleet," said Wang Zhenghua, chairman of the carrier.
The carrier plans to expand into overseas markets with the new planes, including flights to Hong Kong and Macau this year and it will apply for permission for routes linking the Chinese mainland and Japan, South Korea and Southeast Asia next year, said Wang.
Despite the economic downturn, the carrier still aims to double net income this year from last year's 20 million yuan and its revenue is expected to reach 2.2 billion yuan this year from 1.6 billion yuan a year earlier, according to Wang.
"We will carry out more measures to achieve the target such as charging fees for checked luggage," Wang said.
Wang also expected more government support such as exempting carriers from business tax and subsidizing those who fly international routes.
Referring to the carrier's plan of selling shares to the public, Wang said the sagging stock market has affected its plan but the carrier will continue preparing for an initial public offering.
The Shanghai-based carrier has ordered 16 A320 jets, at a cost of 6 billion yuan (US877 million), with support from the financial leasing arm of Industrial and Commercial Bank of China., China Construction Bank and HSH Nordbank AG.
It will receive the other 15 jets within three years and the first A320 jet will serve on routes between Shanghai and Lanzhou, Urumqi, Zhangjiajie, Guiyang and Hainan. The carrier operated 11 rental A320 jets before the first purchased jet was delivered.
"The asset-to-debt ratio of Spring Airlines is about 40 percent to 50 percent, much lower than the average level in the aviation industry, so we have adequate cash flow to support the expansion of the fleet," said Wang Zhenghua, chairman of the carrier.
The carrier plans to expand into overseas markets with the new planes, including flights to Hong Kong and Macau this year and it will apply for permission for routes linking the Chinese mainland and Japan, South Korea and Southeast Asia next year, said Wang.
Despite the economic downturn, the carrier still aims to double net income this year from last year's 20 million yuan and its revenue is expected to reach 2.2 billion yuan this year from 1.6 billion yuan a year earlier, according to Wang.
"We will carry out more measures to achieve the target such as charging fees for checked luggage," Wang said.
Wang also expected more government support such as exempting carriers from business tax and subsidizing those who fly international routes.
Referring to the carrier's plan of selling shares to the public, Wang said the sagging stock market has affected its plan but the carrier will continue preparing for an initial public offering.
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