China Hangzhou airport mulls IPO to fund expansion-CEO

Hangzhou Xiaoshan International Airport Co, partly owned by the Airport Authority of Hong Kong, is considering going public to help bankroll an expansion to more than triple its capacity in four years, its chief executive said on Monday.

Hangzhou airport is building a second terminal, part of its 7 billion yuan ($998 million) expansion, which also includes a second runway and the expansion of an existing terminal, Eric Wong said.

"We are studying the possibility of raising funds through listing. The board of directors have formed a team to look at this project specifically," Wong told Reuters on the sidelines of an industry forum.

Hangzhou airport, the country's eighth-businest, handled 11.73 million passengers in 2007, up 18.3 percent from a year earlier, according to official data.

Passenger volume at the airport, a gateway to Hangzhou city, a major tourism attraction, is estimated to exceed 13 million this year, Wang said. By 2010, when the expansion project is completed, the airport, in which the Airport Authority of Hong Kong owns 35 percent, could accommodate 25 million passengers, more than triple its current capacity of 8 million.

Airports around China are rushing to expand their capacity to cater to growing demand from an increasingly mobile population as the country's economy grows at about 10 percent a year.

Two-hour's drive away, Shanghai Pudong International Airport, the country's second-busiest airport, added a second terminal and a third runway last week, part of a 19.7 billion yuan expansion plan that will boost its capacity to 80 million passengers by 2015.

But Wong said he believed there would be plenty of room for smaller airports, especially along the affluent eastern coast, where a booming economy has pushed up air traffic.

"With the growth that we are facing, my worry is that we might reach that capacity before 2012," Wong said.

($1=7.014 Yuan)