Proceeds from the listing will be used to buy 36 aircraft in four years

SHANGHAI - Spring Airlines aims to raise more than $1.2 billion in an initial public offering in the first quarter of 2012 as China's sole budget carrier wants to double its fleet size in the next four years, its president said on Thursday.

Spring Airlines' IPO plan was progressing, Wang Zhenghua told Reuters at the company's headquarters in Shanghai.

A billboard for Spring Airlines in the Shanghai International Pudong Airport. The airline plans to raise more than $1.2 billion in its initial public offering in the first quarter of 2012. [Photo/China Daily]

The 67-year-old, who founded Spring Airlines from a travel agency six years ago, said the IPO aimed to purge "the element of rule by people" at the company, referring to a theory of governance implied by Chinese philosopher Confucius and opposed to rule by law in western countries.

"I started out as a small businessman. I like to be in control of everything ... I see that in my CEO too," said Wang.

"If we want to grow the business, it's not going to work to depend on just a few people," he said.

Spring Airlines hired UBS to help with the IPO and sent a notice to the China Securities Regulatory Commission, the stock market regulator, local media reported earlier this year.

If it takes place, the IPO will make Spring Airlines China's fifth-listed carrier, after bigger rivals Air China, China Eastern Airlines Corp, China Southern Airlines Co and Hainan Airlines Co.

Spring Airlines will raise more than 8 billion yuan ($1.2 billion), a figure estimated by one investment bank in 2006 when the idea of floating the company on a stock exchange first surfaced, Wang told Reuters.

The airline is at the right size to go for a listing as most successful budget carriers went for a listing when their fleet size stood at 15 to 20 aircraft, said Wang.

Spring Airlines hopes to grow its fleet to 60 aircraft from 24 over the next four years, he said.

A shortage of experienced pilots has choked growth of Chinese airlines.

Of the world's expected 800 million new travelers by 2014, about 181 million new passengers will come from China's domestic air routes, while another 33 million will be passengers flying to or from the country via international routes, the International Air Transport Association (IATA) said.

"We are not growing as fast as we would want to. We had initially wanted to have 100 aircraft by 2015," said Wang.

Spring Airlines wants to expand its international routes to countries nearby such as Japan, South Korea and Southeast Asia, as China's booming inter-city bullet train system erodes airlines' traditional markets.

Earlier this month, China launched a new Beijing-Shanghai high-speed train, which cuts travel time on the 1,318 kilometer route to under five hours.

The line is designed to carry 80 million passengers a year, providing heady competition for the airlines on a route notorious for delays.

The Shanghai-Beijing high-speed train "will definitely have a big impact on the airline industry. I see the impact to be profound in three to five years time," Wang said.

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