China joins the world of the cheap airline ticket
China’s growing ranks of middle-class consumers love to fly, putting the nation on track to surpass the US as the world’s biggest airline market within the next decade. But they won’t find many bargains. Budget airlines carry just 7% of domestic fliers in China, according to CAPA Centre for Aviation, an aviation-intelligence company, compared with two-thirds in neighboring India and Thailand. Budget airline AirAsia is aiming to change that, hoping to shake up China’s aviation sector by exporting its no-frills model to the region’s biggest air-travel market. In a regulatory filing last month, it said it plans to open a unit in Zhengzhou, the capital of Henan province. But the Malaysia-based carrier could experience a bumpy landing in China, as the country’s big state-run airlines— Air China , China Eastern Airlines and China Southern Airlines —enjoy a stranglehold that limits the opportunities of low-cost competitors. The incumbents command all the best landing slots and lobby against the awarding of operating licenses and slots to low-cost rivals, said Will Horton, a senior analyst at CAPA. The government also tightly regulates aircraft purchases, limiting the expansion of potential rivals, he said, and airlines are barred from hiring pilots away from competitors to help them grow. “It will take AirAsia a long time to build up and achieve its goals” in China,Horton said. The Malaysian carrier already flies to 15 destinations in mainland China, but setting up a local base would help spur a boom in budget air travel, it said in the filing, and enable AirAsia to capitalize on surging Chinese demand. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2017-06-07/general/china-joins-the-world-of-the-cheap-airline-ticket
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China joins the world of the cheap airline ticket
China’s growing ranks of middle-class consumers love to fly, putting the nation on track to surpass the US as the world’s biggest airline market within the next decade. But they won’t find many bargains. Budget airlines carry just 7% of domestic fliers in China, according to CAPA Centre for Aviation, an aviation-intelligence company, compared with two-thirds in neighboring India and Thailand. Budget airline AirAsia is aiming to change that, hoping to shake up China’s aviation sector by exporting its no-frills model to the region’s biggest air-travel market. In a regulatory filing last month, it said it plans to open a unit in Zhengzhou, the capital of Henan province. But the Malaysia-based carrier could experience a bumpy landing in China, as the country’s big state-run airlines— Air China , China Eastern Airlines and China Southern Airlines —enjoy a stranglehold that limits the opportunities of low-cost competitors. The incumbents command all the best landing slots and lobby against the awarding of operating licenses and slots to low-cost rivals, said Will Horton, a senior analyst at CAPA. The government also tightly regulates aircraft purchases, limiting the expansion of potential rivals, he said, and airlines are barred from hiring pilots away from competitors to help them grow. “It will take AirAsia a long time to build up and achieve its goals” in China,Horton said. The Malaysian carrier already flies to 15 destinations in mainland China, but setting up a local base would help spur a boom in budget air travel, it said in the filing, and enable AirAsia to capitalize on surging Chinese demand. <br/>
