Hainan Airlines says operating leases helped it avoid large depreciation charges and enabled it to exercise greater flexibility in response to market changes. It is common practice for asset-intensive firms such as airlines to make leasing arrangements for assets. Chairman and president Chen Feng told analysts in Hong Kong yesterday the regional carrier operated 13 leased aircraft. The leasing arrangements had facilitated the company's growth because it avoided large depreciation charges and allowed a rapid adjustment of capacity according to market changes, he said. The airline, set up in 1991, plans to sell 71 million B shares, or 15 per cent of the company, next week, once it receives approval from the China Securities Regulatory Commission. A listing is expected on the Shanghai stock exchange next month. Analysts expect the company to raise about US$$30 million. The issue price has yet to be decided. Boeing has forecast China's civil aviation turnover volume would grow 17.2 per cent a year for this decade. In 1995, American Aviation Investment, an investment fund controlled by United States financier George Soros, paid $25 million for a 25 per cent stake in the company. After the share offer, this stake will be diluted to about 21 per cent.