China's top budget carrier Spring Airlines to ramp up international routes amid tourism boom

PUBLISHED : Friday, 28 August, 2015, 8:00am
UPDATED : Friday, 28 August, 2015, 10:10am

Catering to China’s ongoing outbound tourism boom, Spring Airlines, the country's leading no-frills airline, is accelerating its overseas expansion, it said on Thursday. 

It currently flies to 30 cities, nearly half of which are in mainland China. About 30 per cent of its flights are to other Asian destinations, and nearly one-third of its tickets are sold via its mobile app.

But frustrated by increasingly frequent bottlenecks and delays at major Chinese air gateways like Shanghai and Guangzhou, the airline plans to quickly add more routes to foreign shores, one of its senior executives said.

“Recently, [demand for] our regional flights to Japan, South Korea and Southeast Asia has increased dramatically,” Wang Yu, the airline’s vice president, told the South China Morning Post on Thursday. 

It does not serve the Chinese capital due to a capacity crunch at Beijing Capital Airport, the world’s second busiest. A new airport will open in the city in 2019.

China recorded 114 million outbound travellers last year, or less than 10 per cent of its 1.4 billion population, according to figures supplied by the company.

“We will have a golden era in the next few years,” said Wang.

Spring Airlines listed on the Shanghai Stock Exchange in January. Since then its stock price has almost quadrupled from 26 yuan (US$4) to 101 yuan. 

The budget carrier is now worth 40.3 billion yuan (US$6.3 billion), making it the most valuable low-cost airline in Asia.

Its business model has also proven quite profitable: it sells about 80 per cent of tickets directly to consumers online rather than going through middlemen.

Having its own reservation and sales control system translates into savings of roughly 60 per cent in this area of the business, Wang said.

“We’re not just an airline. We’re also an e-commerce company,” he said. “We’re highly sensitive to cost.”

He said using other distribution channels would mean passengers had to pay around 7 yuan per booking instead of 2 yuan at present.

Wang gave the interview at Credit Suisse's 3rd Asia Internet C-Level Conference in Hong Kong. 

He said Chinese people in their 30s make up its main demographic.