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Hong Kong Airlines studying feasibility of IPO

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Hong Kong Airlines Ltd., part of the city’s second-largest carrier group, is studying the feasibility of an initial public offering, President Yang Jiang Hong said.

Hong Kong Airlines Ltd., part of the city’s second-largest carrier group, is studying the feasibility of an initial public offering, President Yang Jiang Hong said.

The company, which is part-owned by the government of southern China’s Hainan province, may place orders this year for six Airbus SAS A330 freighters to boost cargo operations, Yang said in Hong Kong today. Any listing will be in Hong Kong, he said.

A rebound in air travel demand is boosting sales at closely held Hong Kong Airlines and affiliate Hong Kong Express Airways Ltd. Asia Pacific airlines increased international passenger traffic, measured in revenue passenger kilometers, by 12.3 percent in the first seven months of the year, according to the Association of Asia Pacific Airlines.

“We’re studying various options to sell shares, possibly an IPO or back-door listing,” Yang said “We’re very optimistic about the aviation industry, especially when China’s economic growth is supporting demand.”

The carrier will break even and may post a small profit this year, Yang said. Sales in 2010 may rise by 30 percent to 40 percent, he said.

Revenue may triple in 2011 as the airline takes delivery of more planes, Yang said. The carrier put into service an A330 freighter today and expects to get another two passenger aircraft and another cargo plane this year, he said.

Hong Kong Air operates 14 planes and flies to more than 30 cities in Asia. The airline plans to start passenger and cargo flights to Taipei in November and it is now negotiating for landing rights, Yang said.

Next year, the airline wants to start long-haul flights to Paris, London and Sydney, he said.