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Spring Airlines Co., China’s biggest low-cost carrier, plans to revive its initial public offering after a previous application failed to get past the nation’s regulator.
The carrier may sell shares as early as the year end, Chairman Wang Zhenghua said in an interview in Shanghai without providing details. The airline has filed additional documentation with the China Securities Regulatory Commission, Wang said. The regulator said on May 14 that it has canceled the review of Spring Airlines’ IPO application.
Spring Airlines, started by Wang in 2005, had said in May it plans to spend about 2.5 billion yuan ($411 million) to expand its fleet and network amid a surge in travel in the country. 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 an International Air Transport Association’s study last year.
“Low cost carriers will see a faster pace of growth in China in the next few years,” Wang said Sept. 26. The funds from the share sale will be used for new aircraft and expansion of its international network, he said.
Spring is aiming to raise the proportion of international passengers carried and revenue from the current 18 percent to about 25 percent by the end of 2015, Wang said.
He said the airline is in talks with Shenzhen Bao’an International Airport to start a second base in the mainland.
A Shenzhen base will allow Spring Air to reach more Southeast Asian destinations, particularly in Indonesia, Wang said. “We can also basically fly to anywhere in China from Shenzhen, except for maybe Urumqi,” he said.
In the preliminary prospectus, the carrier had said it will buy a maximum of nine Airbus Group NV’s A320 aircraft and three A320 simulators. Spring Airlines has 46 aircraft in its fleet and have bought two A320 simulators, said Wang.
China’s Civil Aviation Administration in February said it would loosen regulations and study tax breaks to encourage budget carriers after removing lower limits on air fares in November. China Eastern Airlines became the first of the three biggest state-owned carriers to start a low-cost carrier in July.
To contact Bloomberg News staff for this story: Clement Tan in Shanghai at firstname.lastname@example.org. To contact the editors responsible for this story: Anand Krishnamoorthy at email@example.com.