Hong Kong Airlines (HX, Hong Kong Int'l) is planning to offer retail investors free flights in an attempt to boost demand for airline's planned dual-currency IPO. Sources familiar with the airline's operations told the International Financing Review that the carrier will offer free mileage to retail investors who subscribe for a certain number of shares in the IPO and hold the investment for a certain period of time.

The carrier was expected to have filed an application with the Hong Kong Stock Exchange for its IPO late last week with a possible fourth-quarter date on the cards.

The IPO is aimed at raising USD500million and will be Hong Kong's first dual currency (Chinese Renminbi (CNY) and the Hong Kong Dollar (HKD)) public offering.

“To be realistic, we are not expecting huge demand for the renminbi tranche, but, being the first such offering, it can definitely help raise the profile of the transaction,” said a source close to the company. "Offering free air tickets is a good way to motivate renminbi holders in the city to look at the HKA IPO. A further appreciation of the renminbi is expected to be limited and, hence, fixed deposit [accounts are] no longer as attractive as in the past. Why don’t they invest the money in something that can at least get them a free air ticket?”

Hong Kong Airlines is not the first airline to offer a retail incentive for its IPO as AirAsia X (D7, Kuala Lumpur Int'l) did the same for its MYR987.5million (USD312million) Malaysia IPO in July last year.