Air China is to reduce its fast-approaching Shanghai initial public offering by 41% due to weak market conditions, the Hong Kong Standard reported Tuesday, citing people familiar with the situation. The country's largest overseas carrier will now only offer 1.6 billion shares with a view to raising US$565 million as opposed to its original plan to generate around US$1 billion by listing 2.7 billion shares. It will fix its A-share price at US$0.35 per share, the newspaper reported. The decision to cut the size of the offering was allegedly made after Air China received orders for only 60% from institutional investors. Analysts put the muted interest down to Chinese airlines being generally unprofitable, rising fuel costs and the offer price being too high compared to that of other Asian airlines. Concerns over the Air China IPO were blamed for a 1.5% fall in the Shanghai Composite Index to a two-month low, although the market is still up 33% since the start of the year.