South Korea’s second biggest budget carrier Jin Air Co. began procedures for initial public offering hoping to become the second low-cost carrier (LCC) member on the main Seoul bourse by the end of the year.

Jin Air run by the nation’s flag carrier Korean Air Lines Co. (KAL) under Hanjin Group, said Tuesday it has tapped Mirae Asset Daewoo Co. to lead-manage its IPO.

Jin Air established in 2008 is fully-owned by Hanjin KAL Corp., the holding entity for Hanjin Group, and ranks the second biggest among six domestic LCCs after Jeju Air Co. that went public in November 2015.

Its operating profit jumped 76 percent on year to 52.3 billion won ($46.5 million) and net income up 73 percent to 39.3 billion won last year. It has kept up profit for seven years in a row. Sales also gained 56 percent to 719.7 billion won last year.

The group is hoping to use the proceeds from selling shares in Jin Air to bolster its capital base. It has used up its cash reserves to have KAL buy shares and assets to help out now-defunct Hanjin Shipping. The holding company’s debt totaled 352 billion won as of December 2016, of which 283 billion won must be paid within a year. Jin Air is estimated to be worth at least 500 billion won.

Jin Air plans to add 8 more airplanes to run a fleet of 30 planes available on 55 routes by 2018 to expand its market share and revenue. It hopes to achieve revenue of 880 billion won this year and over 1 trillion won next year.

By Kim Jung-hwan

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