Fledgling budget carrier Spring Airlines aims for an initial public offering in 2009 to fund aircraft purchases, state press said on November 22.
He Shanghai-based carrier will need about eight billion yuan (one billion dollars) for its planned purchase of aircraft, the China Business News reported, citing Spring chairman Wang Zhenghua.
The group has applied to regulators to buy 20 of the 150 A320 aircraft that China ordered in October during French President Jacques Chirac's visit to the country. Spring currently has four A320s.
In the meantime, Wang said the company will look to a private share placement for its funding needs. Citigroup will be a likely financial investor once the sale is completed some time in 2008.
Wang added that Spring booked a net profit of over 20 million yuan since its maiden flight in July 2005, a sharp turnaround from January this year when the private company said it was losing 2.5 million yuan month. Only last year, Okay Airways, the country's first budget airline, said prohibitive costs were forcing the company to overhaul its budget business operating model. However, demand for air travel is booming and most Chinese airlines are ramping up aircraft purchases to try and meet the heavy demand.