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Budget airlines ready for low-fare take-off
By Cao Desheng (China Daily)
Updated: 2005-06-30 01:38

China could be edging closer to getting its true budget airline after a meeting yesterday between a new Shanghai based carrier and China's civil aviation administration.

A Boeing 737-900 jetliner of the private Okay Airways arrives in Changsha on it's maiden trip. The photo is taken in March. [newsphoto/file]

Private carrier Spring Airlines held talks with the General Administration of Civil Aviation of China (CAAC) to discuss policy barriers blocking the operation of budget airlines.

As one of the four private-run carriers on the mainland, Spring is aiming to establish a new budget airline. "We have to reduce the operation cost in a bid to offer consumers low-price tickets," said Li Weiming, deputy general manager of planning and development. "But the measures we want to adopt have failed to meet the requirements of the nation's civil aviation regulations."

Besides Spring, three other privately funded airlines - Okay Airways based in Tianjin, Eagle Airlines in Chengdu, Sichuan Province, and Huaxia Airlines in Gansu Province - are promising to establish low-fare, no-frill airlines, but are facing the same problems as Spring.

Liu Jieyin, president of Okay Airways, which in March became China's first private carrier to take to the skies, tried to adopt the low-cost strategy for his company, but his attempt was thwarted.

"In the existing policy environment, we have found a lot of insurmountable obstacles to reducing operation costs," Liu said.

It was to address these obstacles that Spring met with CAAC officials in Shanghai yesterday.

Also present at the hearing were consumers, airport representatives and aviation experts.

According to Spring's plan, unlike traditional airlines, it will provide no in-flight meals in the price of the ticket but will offer a complimentary bottle of mineral water.

Spring proposed that if a flight was delayed or cancelled and it was the carrier's fault, Spring would not provide free meals and would offer lodgings only when the delay exceeded four hours after 10 pm.

However, State industry regulator CAAC says the airline must provide boarding and lodging to passengers if the flight is delayed by more than four hours at any time of day. If the delay exceeds 10 hours, passengers are entitled to at least a partial refund. Other conflicts with the CAAC regulations include the maximum weight of luggage that the airline transports included in the price of the ticket, and landing and takeoff fees at airports, Li said.

Spring Airlines, owned by Shanghai Spring International Travel Service Ltd, plans to start operation before the end of the year.

Thirty-five pilots have been hired for takeoff, and a fleet of three Airbus A320 jetliners are expected to be introduced to handle the flights, Li said. "China's aviation policies fail to support the development of budget airlines, and Spring is trying to pave a way for it."

CAAC officials declined to comment on the feasibility of low-cost airlines in China.

(China Daily 06/30/2005 page2)

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