China will support rise of budget airlines
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E-mail Shanghai Daily, July 22, 2012
China will encourage the development of budget airlines to reduce flight ticket prices, the country's civil aviation regulator said Friday.
Apart from low-cost carriers, other airlines should also cut prices by simplifying service processes and changing operational models, said Li Jiaxiang, director of the Civil Aviation Administration of China.
"The administration will limit flight ticket price increases, and there will be no set minimum price as I think the lower the better," Li told a press conference in Beijing, adding that budget airlines will have good prospects in the next few years in China because they can better meet market demand.
Spring Airlines is the country's only budget airline to successfully carve out a piece of the Chinese airline industry. The Shanghai-based airline, launched in 2005, earned 470 million yuan (US$73.79 million) in 2010. Spring Airlines has not yet disclosed 2011 results. It has filed an initial public offering application in Shanghai.
Zhang Wu? spokesman for the airline, said the aviation regulator has issued policies to support the airline in recent months. The policies include allowing it to operate the popular Shanghai-Beijing route along with state-owned airlines.
Many domestic airlines, including Shenzhen Airlines, West Air and Lucky Air, once also planned to enter the low-cost market, but failed, according to Zhang.
Li also said China will build 82 new airports and revamp 101 others during the 12th Five-Year Plan period (2011-2015) to meet rising air travel demand. China will have around 230 airports for civil aviation use by 2015, up from 180 in 2011. He dismissed concerns that the nation's airports are suffering losses, saying that the 180 existing airports earned 4.6 billion yuan last year.
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