(Yicai Global) March 5 -- China Express Air Inc., also known as Huaxia Airlines, became China's first listed airline focused on regional air transport and the 8th airline business to go public in the country.

The Chongqing-based carrier [SHE:002928] rose 43.99 percent on the first day of trading to close at CNY29.72 (USD4.68) and hit the 10 percent limit up on March 5, reaching CNY32.69.

CEA has long focused on regional air transport with almost all of its flights being feeder routes and nearly 60 percent of journeys lasting under one hour. The company holds a strong market share across its top 10 biggest-earning routes, of which a large proportion are operated exclusively.

Different from the full-service models adopted by China's largest four airlines and low-cost approaches of budget carriers Spring Airlines Co. and China West Air Co., CEA sells flight capacity directly to local governments and airports through partnerships. The model means that regardless of passenger numbers, governments and airports will still pay full capacity rates, said industry insider Lin Zhijie.

Under this business model, local governments will try to help CEA attract more customers while CEA can also avoid market risks and focus on operations to secure financial support from the governments and airports, Lin added.

This kind of cooperation model is similar to a government charter operation. Several regional airlines in the country can obtain similar government subsidies when opening new routes in some second-, third- and fourth-tier cities.

Many regional routes are only able to break even through the support of local government subsidies, one insider said, adding that if airport resources are limited, trunk line capacity will spill over to regional lines and revenue that previously came mainly from government subsidies can become very unstable.

CEA has established cooperation agreements with about 40 local governments and airports, it said in its IPO prospectus. The income from these two kinds of customers accounted for 40 percent of the company's main business revenue last year.

The firm covers 34 percent of domestic feeder destinations and 10 percent of domestic regional routes. Although CEA's market share in the domestic regional aviation market quite big, its overall market share in the aviation industry as a whole is less than one percent. This shows that there is still much room for growth in domestic regional airline services.

The company has set up five flight bases in Guiyang, Chongqing, Dalian, Hohhot and Xi'an, and operates more than 80 routes across more than 80 airports. The company has a fleet of 32 Bombardier CRJ900s and has introduced three Airbus 320s since 2017.