Hong Kong Airlines President Yang Jianhong reportedly stated Grand China Airlines, parent of Hainan Airlines, and Hong Kong Airlines, 45% controlled by Hainan Airlines, plan to raise a combined HKD15 billion (USD1.9 billion) in an IPO in Hong Kong in 2011 (South China Morning Post/Reuters/Shanghai Daily, 23-Nov-2010). Grand China Airlines reportedly plans to raise more than HKD10 billion (USD1.3 billion) in 1H2010 while Hong Kong Airlines is selecting underwriters for a planned HKD5 billion (USD644 million) IPO in 3Q2011. Mr Yang stated the application for Hong Kong Airlines to list as a "red chip" or overseas registered Chinese company, had been approved by the State Council. Grand China, which postponed a share sale plan two years ago due to the global economic crisis, is also the parent of China Xinhua Airlines, Shanxi Airlines and Changan Airlines. Hong Kong Airlines, which operates a fleet of 18 aircraft, plans to use the proceeds of its IPO to fund aircraft acquisitions with 33 widebody Airbus aircraft on order.
Hong Kong Airlines and Grand China Airlines plan USD1.9bn IPO
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China and France expand flights for airlines, giving China aeropolitical negotiating leverage
China and France have agreed to a significant expansion of flights between their countries. Chinese airlines, which have no more than 50 weekly flights to France, will be permitted to grow to 126 weekly flights within a few years. This tranche of rights will likely double the number of Chinese airlines in France (currently four) and take Chinese airlines to serving French cities other than Paris.
Air France will likely grow partnerships with SkyTeam's China members, although Air France will need to make concessions on its existing China JVs. It is unclear whether Air France will revisit considerations of investing in China Southern.
Chinese airlines will become France's second largest source of foreign long haul flights, and in the long term China could surpass the US. For China, France could become its third largest long haul market after the US and Australia. France is China's third major aeropolitical expansion in recent months, after the UK and Australia. This could give China leverage to press the US and Canada to expand traffic rights, although these markets are far more convoluted.
Cathay Pacific to Christchurch: contentious Air New Zealand JV as Cathay seeks greater "agility"
As Cathay Pacific is being forced to undergo a competitive metamorphosis it is exploring all options. The latest example is an expected announcement of a new Cathay Pacific route from Hong Kong to Christchurch in New Zealand's South Island. The service is expected to be seasonal (for the New Zealand summer), and is only Cathay's second seasonal long haul route after the Jan-2017 announcement of northern summer service to Barcelona.
New Zealand is a small network component for Cathay but one of its last strongholds, due to a joint venture with Air New Zealand. The New Zealand government reluctantly extended approval for the JV despite Cathay and Air NZ reneging on an offer to use it to link Hong Kong with Christchurch, as well as Auckland. This would thereby have extended the JV to benefit more of New Zealand – a sensitive local matter based on the assertion that Auckland was receiving disproportionate air service benefit.
Air NZ's JV with Cathay arch rival Singapore Airlines has resulted in SIA growing its presence in Christchurch. Cathay has been more frugal, and the NZ government determined that although the JV reduced competition, there was no prospective third competitor, so no harm done.
But now that Hong Kong Airlines has entered Auckland, and then expanded, the Cathay-Air NZ JV faces disbanding. By finally committing to a Christchurch route Cathay appears to be bidding to keep the JV in play. But the New Zealand government will still probably withdraw approval of the Air NZ-Cathay JV.