Spring Airlines purchases A320 jets
Bloomberg in London
Spring Airlines, the mainland's biggest non-state-controlled carrier, has signed an accord with Airbus for 30 additional A320 jets and may buy more as government policy shifts to favour discount airlines.
The Shanghai-based airline signed an agreement on November 22 for the A320 single-aisle jets due from 2015, pending government approvals, said Jonathan Hutt, deputy general manager for strategy. The purchase has a list price of about US$2.75 billion, though customers typically get discounts.
"We hope this is a sign Spring will be able to make far larger orders," Hutt said.
The carrier has a goal of building a fleet of 100 planes by 2020 after revising the target from 2015 because of delays in approval for more jets, Hutt said. Management intends to meet next month to discuss further expansion plans, he said. Airbus, based in Toulouse, France, declined to comment.
China's Civil Aviation Administration announced this month that it had scrapped a floor on air-fare prices in support of low-cost carrier development and liberalisation of other measures that could spur the segment. The nation is easing aviation regulations and boosting infrastructure spending as Chinese carriers are forecast to require over 5,580 planes in the next two decades.
"Within the last 12 months we have seen many signs that obstacles we currently face will disappear," Hutt said. Spring's goal is to become "the first low-cost mega-carrier in the north Asia region," he said.
The policy liberalisation will probably spur new entrants, Hutt said, with potential for five to eight new discount airlines being set up in the next two years. Some will be new entities and others affiliated with Chinese network carriers.