China budget carrier listed on Shanghai bourse

SHANGHAI - Spring Airlines became China's first budget carrier to list after its initial public offering of 2.5 billion yuan ($410 million) on the Shanghai Stock Exchange Wednesday.

The stock, with up to 100 million shares, rose to the limit on its first day of trading, closing at 26.15 yuan per share from its issue price of 18.16 yuan.

The company said in its IPO prospectus that it planned to raise funds to purchase nine new Airbus 320 aircraft as well as three new flight simulators.

Industry observers said the stock of Spring Airlines is much higher than those of China's four listed commercial airlines, including Air China and China Eastern Airlines, indicating the carrier's stronger profitability.

The airline reported a net profit of 270 million yuan in the first half of 2014 amid a tough year for the civil aviation market. Experts estimated its yearly profits would rise by more than 10 percent in 2014.

The Shanghai-based firm is one of the first private airlines in China. Its initiators include Shanghai Spring International Travel Service Co Ltd, Shanghai Charter Airplanes Travel Service Co. Ltd, Shanghai Chunxiang Investment Co Ltd, and Shanghai Chunyi Investment Co Ltd.

Budget airlines in China constitute less than 5 percent of the country's total civil aviation market which boasts a big demand for low-cost airlines.

In addition to operating regional lines, Spring Airlines launched a direct air route between Wuhan, capital of central China's Hubei province, and the western Japanese commercial city of Osaka in July last year. It announced plans to open new air routes to the Maldives, Tokyo, Moscow and Melbourne in the future.

Zhang Wu'an, spokesman of the airline, said Spring Airlines aims to compete with international budget carriers.