Shares of Air China (SH 601111), the national flag carrier, started to be traded Friday morning on the Shanghai Stock Exchange, with open price lower than the issuance price.

Air China witnessed its share price open at 2.78 yuan (US$0.35) on the first trading day in mainland bourse, 0.02 yuan lower than its issuance price.

The airline has issued 1.639 billion A-shares at a price of 2.80 yuan per security for its initial public offering on home stock markets.

It has raised net proceeds of 4.5 billion yuan from the share sale, substantially less than the eight billion yuan the carrier had hoped to raise.

The proceeds from the share sale will go to the purchase of new aircraft, including 20 Airbus 330-200s, 15 Boeing 787s, and 10 Boeing 737-800s, the company said earlier.

The money is also to be spent on expanding its operations at Beijing Capital International Airport, its home base.

(Xinhua News Agency August 18, 2006)