China taps incentives to support domestic airlines
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E-mail Shanghai Daily, July 13, 2012
China will tap financial services for domestic airline companies to help them list and issue bonds to boost the civil aviation industry.
"China is considering setting up investment companies to buy stakes in the airlines," said the guideline issued yesterday by the State Council, China's Cabinet.
The four largest state-owned Chinese airlines - Air China, China Eastern, China Southern and Hainan Airlines - are listed on the A-share market. Some private carriers like Shanghai-based Spring Airlines and Juneyao Airlines are hoping to list.
"We are still waiting for the reply from the China Securities Regulatory Commission," said Wang Zhenghua, founder and chairman of Spring Airlines.
But he said that Spring will not invite other major airline to be shareholders in the carrier.
"Many companies, including Air China and China Eastern, want to become share holders of Spring Airlines, but I declined as I fear the strategy of the budget carrier may be impacted by them," he said.
Wang Junjin, chairman of the Juneyao Group that owns Juneyao Airlines, has said it planned to list this year.
The guideline, the first from the State Council to the industry, said China will create a "safe, convenient and highly efficient" modern civil aviation industry by 2020.
Li Jun, deputy director of the Civil Aviation Administration of China, expects the domestic civil aviation market to grow by 10 percent this year.
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