Air Busan, one of South Korea’s leading budget carriers, is pushing forward plans to launch an initial public offering, seeking to channel in fresh capital to better strengthen itself against rising competition, company officials said Monday.

The airline company, founded in 2007, held a board meeting in Busan on Monday to discuss who could potentially lead the IPO process, scheduled for completion by the end of next year.
 

“The company organized the meeting to bring our stakeholders together to study various options, including the direction and timing of the planned IPO,” an Air Busan spokesperson told The Korea Herald.

By going public, Air Busan is expected to raise at least 100 billion won ($86.3 million) in new funds. The company currently holds around 50 billion won in capital.

“We are seeking fresh investments to strengthen our footing against increasing market competition. As the firm relies entirely on leased aircrafts, the newly channeled funds may be used to purchase our own aircrafts to cut down costs,” he said.

The company’s recent moves come following failed efforts last year to convince shareholders and Busan City to approve plans to pursue an IPO.

Air Busan is owned by Korean airline giant Asiana Airlines (46 percent), a group of local companies including Seun Steel and Nexen Corp. (49 percent) and the city of Busan (5 percent).

Beginning from 2010, the firm has been able to remain profitable for five consecutive years. It recorded retained earnings of 23.7 billion won in 2014, the first for a domestic low-cost airline company.

Meanwhile, Jeju Air became the first among the country’s five budget carriers to list on the Korea Exchange earlier this month on Nov. 6.

By Sohn Ji-young (jys@heraldcorp.com)