Harder times for budget carriers

Although the public is still concentrating on the ongoing search for the missing Malaysia Airlines aircraft and the investigation into the tragedy, aviation and tourism observers have begun to calculate the fallout.

Cai Jianming, a transportation industry analyst with Shenzhen-based CIConsulting, said the MH370 incident will definitely affect the red-eye fight business of airlines and the operations of low-cost carriers.

"Chinese passengers tend to choose large airlines out of a long-held notion that large companies have better safety records, so those start-ups or budget carriers are more likely to be hit by the incident," he added, anticipating the consequences will set back the recent efforts by the central government to boost the nation's burgeoning low-cost airlines.

The Civil Aviation Administration of China issued a set of guidelines in late February, saying it would adjust the cap on the fleets of budget airlines and encourage companies with good safety records to expand more quickly.

The guidelines pledged to lower the threshold for the establishment of new low-cost carriers, streamline approval procedures and cut airport charges in third- and fourth-tier cities.

"Carriers that have many red-eye or low-cost flights can expect a coming period of hardship," Wu Peixin, a civil aviation expert in Beijing, said. "They must promote the awareness that their safety standards will not be compromised by the low-priced tickets."

The MH370 incident has also cast a giant shadow over travel to Malaysia for many Chinese, with nearly 80 percent of respondents in an online poll saying they will not go to the Southeast Asian nation in the near future.

The poll, which was conducted by Sina.com, one of China's most popular news portals, surveyed nearly 60,000 Internet users. Only 18 percent of respondents said they would not exclude Malaysia when choosing a travel destination.

Most netizens who made comments after taking part in the poll said the tragedy of losing more than 239 people, most of them Chinese, as well as the "awkward measures" taken by Malaysian authorities in dealing with the incident, make them want to avoid travel there.

Malaysia has been among the top 10 overseas destinations for Chinese tourists over the past several years. In 2013, nearly 1.8 million people from China traveled to the Southeast Asian nation - a 14.9 percent year-on-year increase.

The Malaysia Tourism Promotion Board said China was Malaysia's third-largest tourist market last year, behind Singapore and Indonesia, and it was expecting to host 2 million Chinese visitors this year.

On March 26, Beijing-based China Youth Travel Service, one of the country's largest tour operators, announced that it has suspended cooperation with Malaysia Airlines and would cancel existing flight arrangements with the carrier.

New bookings would be suspended and existing itineraries that include Malaysia Airlines had been changed to other carriers, it said.

The move has been followed by two major online tour providers, LY.com and eLong.com. The two companies have announced that they would stop selling Malaysia Airlines tickets until the Malaysian authorities extend a reasonable explanation to the Chinese public and relatives of those who were on board the MH370.

Another large travel agency, China International Travel Service Head Office, has seen a sharp decline in consumers signing up for tours to Malaysia, according to its publicity officer, Meng Qingfu.