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Hainan Airlines to buy US$4.2b of planes, issue bonds
[SHANGHAI] China's Hainan Airlines Holding said it plans to spend 28.9 billion yuan (S$5.8 billion) on new planes, as it expands its fleet to take advantage of strong demand from Chinese travellers.
The introduction of 19 planes into its fleet is expected to increase total annual revenue by 5.14 billion yuan, Hainan Airlines said in a Saturday filing to the Shanghai stock exchange, adding that it will raise some of the funds through a 15 billion yuan issue of convertible bonds.
It did not specify what plane type it plans to purchase.
The company's 238-strong fleet currently consists of 205 Boeing aircraft, 167 of which are Boeing 737s, and 33 Airbus, according to its annual report.
Passenger traffic at Hainan Airlines grew 11.9 per cent last year, driven by a 22.7 per cent jump in outbound travel. It opened 42 international routes last year. It now has a network of more than 1,000 routes, 900 of which are domestic.
Hainan Airlines, a unit of Chinese conglomerate HNA Group , said it expected traveller demand to keep improving with the growth of the Chinese economy and consumer incomes.
"The fleet expansion will grow the company's capacity and act as strategic preparation for the company's plans to expand its route network and increase its market share," Hainan Airlines said in the statement.
The company posted a 42.1 per cent fall in first-quarter profit in April.