"Institutional investors were not excited about Air China's shares and the share subscription was much less than what Air China had planned," a source at CITIC Securities told China Daily yesterday. The securities house was one of the three underwriters of Air China's IPO.

"Air China chose a bad time for its domestic listing," said the source, who wished to remain anonymous.

Rao Xinyu, secretary of the board of Air China, declined to comment on the speculation. She said that the airline would announce the details of its share sale today.

Air China Ltd is likely to cut the size of its domestic share sale by 40 per cent, according to media reports yesterday. The Beijing-based carrier had planned to issue no more than 2.7 billion shares.

After strategic corporate investors earmarked 350 million shares at the end of July, Air China planned to sell up to 1.175 billion A shares to institutional investors by the end of last week. A similar amount of shares would be sold to retail investors tomorrow.

Analysts said Air China's share price was set too high to attract investors, given that so many firms are set to list in Shanghai in the wake of the government lifting its ban on domestic IPOs in May.

Air China last week set the price range for its Shanghai listing at between 2.75 and 2.95 yuan per share, 3-10 per cent less than its H shares. This is a smaller discount than Bank of China's indicative price range before its Shanghai IPO in June. Compared to its H shares, the bank's share price was set at a 9-12 per cent discount.

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