Monday, 31 December 2018

CHINA: Spring Airlines Buys US$122M Into China Southern Airlines

Spring Airlines, a low-cost carrier, has subscribed to China Southern Airline’s A-share non-public offering in a deal worth 846 million yuan (US$122.78 million), becoming the fifth largest shareholder of the company.

Spring Airlines has subscribed for a total 140.53 million A shares in China Southern Airlines, at a price of 6.02 yuan per share.

It accounts for 1.63% of the share capital after the completion of the issuance.

It is the second time that domestic private airlines have invested in one of the three major state-owned aviation enterprises after the Juneyao Group and its private airline Jixiang Airlines bought into China Eastern Airlines in July.

Spring Airlines said it is actively responding to the call of the state to deepen the reform of state-owned enterprises’ mixed ownership, strengthening strategic cooperation between state-owned capital and private capital, and further stimulating capital vitality.

Spring Airlines Co., Ltd. is a low-cost carrier with its headquarters in the Homeyo Hotel in Changning District, Shanghai, China. While the company adopted the English name Spring Airlines, the Chinese name literally means Spring Autumn Airlines.

Spring Airlines is the aviation subsidiary of Shanghai Spring International Travel Service. It reported a net profit of 950 million yuan or $143 million in 2016

The airline was given approval to be established on 26 May 2004. Its first aircraft, an Airbus A320 formerly of Lotus Air, was delivered on 12 July 2005, at Shanghai Hongqiao International Airport.

Spring Airlines started operations on 18 July 2005 and the first flight on that day was between Shanghai and Yantai. Daily flights to Guilin were also initiated.

To keep operating costs low, Spring sells tickets exclusively from its website and some designated ticket offices, bypassing travel agents.

Spring no longer offers complimentary on-board meals nor complimentary water; however passengers are able to purchase meals and beverages on board. In December 2006, the airline offered a 1-yuan promotional price which caused trouble with government officials.

In late July 2009, Spring's plan to establish overseas routes was granted by the General Administration of Civil Aviation of the People's Republic of China, making it the first budget airline in China to explore the international market.

The airline plans to operate short-distance routes linking mainland Chinese cities to Hong Kong and Macau, as well as neighboring countries such as Japan, South Korea, Cambodia, Singapore, Vietnam and Thailand.

On July 29, 2010, Spring Airlines launched its first international route linking its home city Shanghai and Japan's Ibaraki Airport, about 80 kilometers northeast of Tokyo.

2 months later, on September 28, the airline successfully introduced its first flight from Shanghai to Hong Kong with almost full passengers on board. Spring's daily flights from Shanghai to Macau commenced on 8 April 2011 with further international destinations following in the second half of 2011.

Since January 2015, the company has been listed on the Shanghai Stock Exchange.

Spring Airlines also operates a subsidiary in Japan and is the first Chinese airline to do so.

In 2015, Spring announced plans to build a 250-300 room hotel at Chubu Centrair International Airport in Nagoya, Japan, a rare instance of a low-cost carrier entering the hotel business.

The Spring Airlines fleet consists of the following aircraft:

* Airbus A320-200 - 80 Aircraft

* Airbus A320neo _ 1 Aircraft

On June 6, 2014, an Airbus A320 operated by Spring Airlines experienced a runway excursion on the right side of the runway, and striking a light in doing so, the pilot then attempted to go around, but had a tail strike because he pulled up too much at Xiamen, according to another pilot at Spring Airlines.

There were no injuries, but the aircraft sustained substantial damage. An investigation has been opened by China's Accident Investigation Board.

Tourism Observer

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