Grand China Airlines, China's fourth-largest airline, is likely
to be unveiled and listed overseas this year, according to Chen
Feng, board chairman of Hainan Airlines.
"The possibility to go public this year is very high," he told
China Daily on the sidelines of the annual session of the
National Committee of the Chinese People's Political Consultative
Conference (CPPCC).
Hainan Airlines Group, parent company of Hainan Airlines Co Ltd,
has obtained approval from the General Administration of Civil
Aviation of China, the country's civil aviation regulator, to
establish a new carrier by merging Hainan Airlines and its
subsidiaries: Xinhua Airlines Co, Chang'an Airlines Co and Shanxi
Airlines Co.
The new carrier, Grand China Airlines, temporarily named Xinhua
Shareholding Co Ltd, aims to get listed overseas to raise funds for
further development.
By June last year, Xinhua Shareholding raised more than 3
billion yuan from domestic and international investors, including
the Hainan provincial government, international investor George
Soros and Hainan Airlines Group.
Xinhua Shareholding has already replaced Soros as the biggest
shareholder in Hainan Airlines with a private share placement in
June last year.
"We are discussing a listing plan, but there is still no
timetable at this stage," Chen said.
But he said he expected the company to raise between 4 billion
yuan and 5 billion yuan when it gets listed.
Li Lei, an analyst with the CITICS China Securities, said the
integration and merger are part of a plan to raise capital and sell
stakes in Hong Kong as the airline plans to acquire more aircraft
and expand its network.
The funds raised will help Grand China Airlines to compete with
the country's big three airlines Air China Ltd, China Eastern
Airlines Corporation and China Southern Airlines Co he said.
Chinese airlines are expanding rapidly thanks to the rising
incomes and trade growth, which generate increasing demand for
leisure and business travel.
Hainan Airlines, which operates 500 routes, is mainly a domestic
carrier but also flies to foreign destinations, including Bangkok,
Singapore, Kuala Lumpur, Osaka and Budapest.
Hainan Airlines Co Ltd has A and B shares trading on the stock
market.
For its expansion, Hainan Airlines inked a $2.7-billion deal
with Brazilian aircraft manufacturer Embraer to buy 100 planes.
Deliveries will begin this year.
Analysts believe the deal will push forward the development of
regional air transport market in China.
(China Daily March 6, 2007)