A flight attendant walks through a CRJ900 regional passenger plane. (Photo : Getty Images)
China Express Air, an airline based in Chongqing, is on track to become the first listed Chinese regional airline, as it has a proposed initial public offering on the Shenzhen Stock Exchange later this year.
China Express stated that it plans to raise 1.68 billion yuan by issuing up to 40.5 million shares on the Shenzhen bourse.
According to its prospectus released on China Securities Regulatory Commission's website, the funds that it will raise will be used in establishing an aviation training school and purchasing aircraft engines.
Currently, it has been operating a fleet of 28 CRJ-900ER planes on scheduled passenger flights to more than 70 destinations across China. It currently has air bases in Chongqing, Dalian, Xi'an, Hohhot and Guiyang.
"The demand for fast transportation has exploded in third- and fourth-tier cities," said Zou Jianjun, a professor at Civil Aviation Management Institute of China's Department of Economic Management.
"In the next three to five years, the growth rate of the regional air market in China will be much faster than major air routes, with a growing demand for ecotourism and agricultural products in smaller cities," he added.
Zou also stated that China is increasing efforts into the development of international and regional routes. The country is also making structural adjustments to air transport capacity.
These advancements will be a major competition for domestic routes and high-speed trains.
In the wake of the listing of budget airline carriers Juneyao Airlines and Spring Airlines on the A-share market in 2015, China Express is on the course to become the eighth domestically listed airline if it receives a regulatory approval from the Initial Public Offering.
Its prospectus indicated that China Express will specialize in regional routes for most of its 100-seater jets. This is because regional air routes account for about 95 percent of its total business, 60 percent of which have fly times of less than an hour.
China Express achieved sales revenue of 1.92 billion yuan and a profit margin of 329 million yuan in the first nine months of 2016.
