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Air China seeks US$750m

By Irene Shen (Shanghai Daily)
Updated: 2007-01-24 14:18

Air ChinaLtd, China's largest international carrier, is seeking to borrow at least US$750 million this year to expand its fleet as travel demand rises in the world's second-biggest aviation market.

The airline plans to add 24 planes this year, Air China spokeswoman Rao Xinyu said inBeijingyesterday, according to Bloomberg News.

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"We may seek more financing this year to fund the expansion," Rao said, without elaborating on the timetable or the types of aircraft the airline will buy.

Chinese airlines are seeking to finance expansion plans as the country's economic growth makes air travel affordable for more people. China's carriers flew 15 percent more passengers and 11 percent more cargo last year, in an aviation market that was second only to the US in size.

"China's big airlines have to expand their fleets to keep their market shares," said Alan Lam, an analyst at Guotai Jun'an Securities (Hong Kong) Ltd, who rates Air China's stock "buy."

Air China raised 4.59 billion yuan (US$590 million) in August to buy jets, including 25 planes from Boeing Co and 20 Airbus SAS A330-200s.

The airline in December won support from 99 percent of shareholders for a HK$3.23 billion (US$414 million) cash offer for shares it didn't already own in China National Aviation Co. The HK$2.80 per shareacquisitionwill almost double Air China's stake in Cathay Pacific, to 17.5 percent.