Budget airlines set to soar as limits are lifted

A Spring Airlines plane at an airport in Nantong, Jiangsu province. Low-cost airlines are set to take off in China. Provided to China Daily

New civil aviation rules present a golden opportunity for low-cost carriers to expand in China, Wang Wen reports.

There can be more Chinese budget airline carriers following the regulation change by the Civil Aviation Administration of China.

The administration released a notice to cancel limits on the lowest price, which means airlines can provide more discounts. The largest discount for air tickets had been 45 percent, according to the former regulations.

Meanwhile, the administration is encouraging Chinese main carriers and private capital investors to put money into budget airlines.

The civil aviation authority also is working on some specific policies to support the growth of budget airlines, including airplane purchases and route applications, Xia Xinghua, deputy director of the administration, said in a seminar on budget aviation.

Airplane purchases, route applications and jet fuel prices were the main obstacles for Chinese low-cost airlines. The situation may change because of the authority's support.

The authority is also considering developing standards for budget airlines because there is no official definition of them in China yet.

Generally speaking, some items are features of budget airlines globally, such as cheaper tickets, higher income from non-flight business and lower operational costs.

Only two Chinese airlines are low-cost carriers at the moment: Shanghai-based Spring Airlines Co Ltd and Chongqing-based West Air Co Ltd.

"It is definitely good news for privately owned airlines to change the lowest price," said Wang Zhenghua, chairman of Spring Airlines, the largest budget carrier in China.

Spring Airlines was fined by the local pricing bureau in Jinan, Shandong province, in 2006 because the carrier provided some tickets at 1 yuan on its Shanghai-Jinan route. The price broke the Civil Aviation Administration of China's former regulations. The carrier withdrew from the route.

"According to the new rules, tickets costing only 1 yuan will not be forbidden anymore," Wang said.