Hong Kong Airlines reveals plan for dual currency IPO worth US$500m

Hong Kong Airlines' proposed share sale, the city's first dual-currency deal, is set to test investor appetite for the competitive and risky sector.

Industry views of the regional carrier's prospects are fairly evenly divided, given the operational challenges from premium airlines and short-haul budget carriers that offer competitive pricing to a growing number of travellers in the region.

"Admittedly, the appetite for airlines is low among investors, given the recent spate of disasters and concerns over excess capacity," K Ajith, a Singapore-based analyst at UOB Kay Hian Research, told the South China Morning Post.

"There is substantial concentration risk for the regional carrier and it could be vulnerable to entrance by new players or budget airline startups in North Asia," he added.

Hong Kong Airlines, owned by HNA Group, is planning to raise US$500 million in a Hong Kong float in what could be the first dual-currency IPO. It plans to offer half of the retail tranche in yuan, with the rest in Hong Kong dollars.

HNA is the parent of Hainan Airlines and owns both of Hainan's airports, as well as a number of hotels and travel agencies.