UPDATE 1-China's Spring Air to expand fleet to 100 jets

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Wed Jul 29, 2009 4:40am EDT

* Aims to boost fleet to 100 by 2015 from 13 now

* Looks at adding Airbus A320 planes

* Plans to list in Shanghai in H2 2010

* Estimates sharp rise in earnings in 2009 (Adds quotes, sales estimates, earnings, details)

By Fang Yan and Edmund Klamann

SHANGHAI, July 29 (Reuters) - Privately run Chinese carrier Spring Airlines aims to boost its fleet of aircraft to 100 by 2015 from just 13 now, and is only looking at adding planes from the Airbus (EAD.PA) A320 family, its chairman said on Wednesday.

Spring Airlines plans to list its shares in Shanghai in the second half of next year to help fund aircraft purchases, Wang Zhenghua told reporters on the sidelines of an event to celebrate the carrier's fourth anniversary.

"We are talking to underwriters and financial advisers now and we want to have two or three eventually help handle our A-share IPO," Wang said.

He declined to give a fund raising target but said the carrier could have a market capitalisation of 8 billion yuan ($1.17 billion), citing an estimate provided by Citigroup in 2006.

Spring Air owns only one of its 13 planes currently in operation, but it may own as many as 30 of its aircraft in 2015 when it has a much bigger fleet, he added.

China's airline industry was hit hard last year as the global financial crisis dented air travel demand. The country's three major carriers, including Air China (601111.SS) (0753.HK) and China Eastern Airlines (600115.SS) (0670.HK), all racked up hefty losses.

But domestic air traffic has been picking up since the beginning of the year, with June air passenger volume rising 24.6 percent to 17.72 million, the fastest growth rate in at least three years, according to official data.

From January to June, Spring Air carried 1.62 million passengers, up 40 percent from a year earlier. Its net profit tripled to 41.17 million yuan, with sales up 20 percent at 894 million yuan, company data showed.

For the full year, net profit is estimated at roughly 100 million yuan, up sharply from 21.04 million yuan in 2008, Wang said.

Spring Air, which provides domestic service only, recently received regulatory approval to launch flights to neighbouring countries and regions, including Hong Kong, Taiwan, Japan, South Korea, Russia and Southeast Asia.

The only other non-state Chinese carrier permitted to fly out of mainland China is East Star Airlines, which filed for bankruptcy protection in June after it was grounded by the aviation regulator in March.

Wang did not say when the carrier would start offering international flights. ($1=6.830 Yuan) (Reporting by Fang Yan and Edmund Klamann)

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