Hong Kong Air May Hold $300 Million IPO in Third Quarter
Jan. 6 (Bloomberg) -- Kenneth Thong, head of corporate governance at Hong Kong Airlines Ltd., talks about the carrier's plans for an initial public offering this year and expansion strategy. Thong speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Hong Kong Airlines Ltd. (HKAIRZ), backed by China’s HNA Group, expects to hold a $300 million initial public offering in the third quarter of the year as it adds planes to challenge Cathay Pacific Airways Ltd. (293)
The carrier will be listed through a holding company that will own 100 percent of the airline and of affiliate Hong Kong Express, Kenneth Thong, its head of corporate governance and international affairs, said today in an interview in the city. Hong Kong Express is being converted into a budget airline, while Hong Kong Air will continue offering full-service flights.
Hong Kong Air expects to add more than a plane a month through 2015 as it builds up its network in a bid to lure travelers from Cathay, the city’s biggest carrier. The airline’s plans include the start of all-business-class flights to London in March and the addition of Airbus SAS A380 superjumbos.
The carrier expects to be profitable on its London route after about two years, Thong said in a Bloomberg TV interview. The airline, which already flies to Moscow, is also looking to add services to Frankfurt and Brussels, he said. Hong Kong Air has also won rights to fly to Taiwan.
The airline is due to begin receiving its 10 on-order A380s in 2015, according to the carrier. The planes will be configured at least 550 seats, Thong said. That will probably include eight to ten first-class seats, which will be set in individual compartments, and 100 to 120 business-class seats, he said.
The premium cabins will be on the top deck of the aircraft, while the lower floor will be used for coach and, possibly, premium-economy seats, Thong said.
This year, the airline expects to receive 15 planes, comprising three Airbus A330-200s and 12 Boeing Co. (BA) 737-800s. That will boost the size of the fleet by eight aircraft, as some of the 737s will replace older planes.
Hong Kong Air’s parent HNA Group also controls Hainan Airlines Co. (900945), China’s fourth-biggest carrier by market value, as well as investing in industries including hotels and shipping.
To contact the reporters on this story: Neil Denslow at in Hong Kong or ndenslow@bloomberg.net Rishaad Salamat in London at rishaad@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
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