Despite speculation to the contrary, Air China president Yin Wenlong insists the carrier will list on the New York stock exchange and is already being urged to do so by several major international financial institutions.
He also says a Hong Kong-based finance house - Yin refuses to identify the company - is near to completing a full-scale evaluation of the carrier's assets: a necessary step before Air China can move towards a share listing. But he acknowledges that the airline would have to alter its revenue accounting and financial systems to meet stock exchange requirements.
The pre-listing preparatory work has gone ahead as the flag finalises details of a new five-year business plan covering the period 1996-2000. Yin refuses to give any specifics but says it will include the purchase of 'dozens of jets worth billions of dollars' and that the carrier is currently evaluating proposals from Boeing, Airbus and McDonnell Douglas.
Air China currently has a 66-strong fleet, 50 of them Boeing aircraft, and operates 80 per cent of all international flights by Chinese airlines. It reported a 437 million Yuan ($53 million) after tax profit last year on revenue of 8.3 billion Yuan ($1.1 billion) and plans growth of around 10 per cent annually.
Speaking in Beijing, Yin would not commit the carrier to a timetable for going to the market, though sources suggest it would be within two years, by which time the success of earlier listings by two other Chinese operators, China Eastern and China Southern, will be fully assessed.
However, Yin says that Air China is approaching a listing with 'extreme caution' because of the carrier's close ties to the state. 'If [Air China] lists its shares on the market it will have national implications. It has to be responsible to the state and for the people working for it and in particular it has to be responsible to the shareholders,' explains Yin.
He has no doubt a listing would be successful, claiming a large number of international financial institutions are already 'very much interested' in the airline going to the market.
'They are all trying to persuade Air China to take that approach, because it is very strong financially and has a very good capacity for reimbursement,' he says. 'Air China is never late reconciling its debt and, though some of the domestic airlines in China are very profitable, they still have some taxes they have not levied to the civil aviation authorities. We are never late paying taxes to the government,' says Yin.
However, he does make it clear that even if there was no listing Air China would have no problems raising money for expansion by other means.
Source: Airline Business
