Spring Airlines files IPO prospectus

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Spring Airlines has filed a prospectus with the China Securities Regulatory Commission, as the low-cost carrier moves forward in its long awaited initial public offering.

The 348-page document details that the carrier plans to raise CNY2.53 billion ($404.8 million) through the issue of up to 100 million shares, which would be listed on the Shanghai Stock Exchange. This would account for about 25% of the firm's total capital.

The majority of the proceeds from the share sale will be used to fund the purchase of nine Airbus A320s and three A320 simulators. Some CNY900 million will also go towards its working capital.

For the first time, the carrier also disclosed its financial numbers. Its net profit has grown consistently over the past three years from CNY483 million in 2011 to CNY624 million in 2012 and CNY732 million last year. Its operating revenue meanwhile jumped 46% to CNY6.6 billion in 2013 from CNY4.5 billion in 2011.

The carrier also revealed it has managed to keep its load factors above 93% for the past three years, while its aircraft utilisation rate is above 11 hours.

Spring says it expects more players to enter the low-cost market following the government's policy changes to encourage the sector's growth. It will however stay ahead of the curve with its first-mover advantage, and as it continues to grow its network together with its fleet.

The carrier has grown to a fleet of 39 A320s serving 64 domestic and international routes as of end 2013.

Spring will become China's sixth listed carrier once the deal is completed. The five other listed Chinese carriers are: Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines and Shandong Airlines.