Hainan Air could take foreign investors

Foreign investors could be brought on board by Hainan Airlines ahead of a US$1 billion initial public offering in Hong Kong next year, the South China Morning Post reported, citing market sources. The company's parent firm, Grand China Airline Holdings, is said to be in talks with international players such as Qantas Airways, Air France, Air Canada, Lufthansa and Korean Air. Grand China also intends to turn the airline into a red chip stock by incorporating it into an offshore company, where it might be joined by subsidiaries Shanxi Airlines, Changan Airlines and Xinhua Airlines. The long-term plan is for the airline, which is partly owned by financier George Soros, to become part of a group that can compete with Cathay Pacific and Dragonair on international and mainland routes. Grand China took control of Hainan Air through a US$700 million private placement in June.