The move by the privately run carrier comes as Spring Airlines Co., the nation's biggest low-cost carrier, proceeds with a plan to raise about 2.53 billion yuan via an IPO in Shanghai.
Juneyao Airlines proposes to offer up to 200 million shares, or 28.6% of its total capital after the IPO, according to a draft prospectus published Tuesday by the China Securities Regulatory Commission.
The proceeds will be used to buy seven Airbus A320 jets and two aircraft engines, and to supplement working capital, it said.
The Shanghai-based carrier also plans to set up a budget carrier unit in Guangzhou to tap thriving air travel demand between the southern Chinese city and countries in Southeast Asia, it added.
Competition in China's airline industry is intensifying after the government's decision to liberalize the domestic market and promote the growth of budget airlines for the first time.
The government this year unveiled long-awaited guidelines to jump-start the budget market, including pledges of financial support, to help existing budget carriers expand.
Unlike its Shanghai-based rival Spring Air, Juneyao targets premium and business travelers with a fleet of 34 Airbus 320 aircraft.
The carrier launched flights in 2006 and now operates more than 60 domestic and international routes.
Source: Wall Street Journal by Joanne Chiu
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