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Thursday, December 11, 2014

Spring Air Plans $285 Million Shanghai IPO for Expansion

Spring Airlines Co., China's first low-fare carrier, plans to raise at least 1.76 billion yuan ($285 million) in an initial public offering to fund purchase of new aircraft amid a surge in travel in the country.

The carrier expects to list in Shanghai Dec. 22, it said in a prospectus posted to the city's stock exchange today. In addition to replenishing working capital, Spring intends to buy as many as nine Airbus A320 planes and three flight simulators.

Founded in 2005 by President Wang Zhenghua, Spring Air is gearing up for an overseas expansion amid a surge in travel demand in Asia's largest economy. Routes within or connected to China will be the single largest driver of a projected 5.7 percent increase in air travel demand in Asia in the four years through 2017, according to a study last year by the International Air Transport Association.

The airline first announced its listing plans in April and its initial application failed to get past the China Securities Regulatory Commission in May. The commission gave the green light in October after the company submitted more documents.

Spring Airlines said last month it has registered to start an aircraft-leasing business in Shanghai's free-trade zone to reduce costs and increase usage of its fleet.

China's Civil Aviation Administration said in February that it would loosen regulations and study tax breaks to encourage budget carriers after removing lower limits on air fares in November. China Eastern (670) Airlines Corp. became the first of the three biggest state-owned carriers to start a low-fare carrier in July.

Source: Bloomberg News by Clement Tan

from China Travel & Tourism News


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