Across The Border | How low-cost carriers are changing the shape of China’s aviation industry
With their cheap tickets and low operating costs, the mainland’s budget airlines are flying high while their long-haul rivals are struggling
China’s low-cost carriers are thriving and poised for further growth as their larger rivals struggle to turn a profit during tough times for the airline industry, according to analysts.
With a business model based on cheap air tickets and reduced operating costs, the budget airlines are maintaining profitability at a time when the mainland’s aviation industry is haunted by a weaker yuan and the prospect of rising fuel costs.
Their success may even force long-haul operators to copy some of their cost-cutting tactics, according to some industry experts.
Offering cheap air tickets has proved a big selling point for China’s growing army of domestic travellers, said Sun Fei, an analyst at Deutsche Bank.
I think it is unnecessary to provide additional services such as food and drinks or entertainment for a journey of less than two hours
For example, the one-way trip from Shanghai to Chengdu departing on December 19 offered by China’s largest budget carrier, Spring Airlines, offers one of the lowest priced tickets, at just 449 yuan. The flight has a similar departure time to others on the same route but with reduced services such as in-cabin catering, and a fee for checked-in baggage.