Air China seeks mainland listing

Air China's shares already trade in Hong Kong

China's largest airline is to apply to list its shares in Shanghai, using the proceeds to buy 45 new aircraft.

Air China said it would sell up to 2.7 million shares for at least 90% of its Hong Kong share price - raising about $830m (£477m).

China is trying to lure top-rank firms back from Hong Kong, to improve the quality of companies listed on its mainland markets.

Air China hopes to list in April after a ban on new share listings is lifted.

Underperforming markets

The China Securities Regulatory Commission has suspended new listings while it undertakes a reform of shareholding rules.

Despite China's rapid economic growth, the stock markets in Shanghai and Shenzhen have performed poorly in recent years and most of the country's high-profile companies list overseas.

Air China has said the funds raised by the initial public offering (IPO) will be used to buy 20 Airbus A330-200s, 15 Boeing 787s and 10 Boeing 737-800s, as well as expanding and improving its airport facilities.

It is upgrading its fleet in the face of rising fuel costs and growing competition from rivals like China Eastern Airlines and China Southern Airlines.

In its last set of results, for the first half of 2005, Air China reported a 25% fall in net profit to 591m yuan ($73m; £42m).