Budget airlines to get a boost from govt in 2014
The civil aviation authority has given assurances that it will support the development of low-cost airlines next year, in a move that experts say is aimed at helping Chinese airlines survive amid harsher market conditions.
Major airlines are encouraged to establish their own budget carriers, said Li Jiaxiang, head of the Civil Aviation Administration of China, at an annual conference on Monday.
The administration will provide them with convenience in the use of airport terminals, runways and parking aprons, he said.
More flexible policies in terms of the opening of new air routes, airline schedules and pricing schemes will also be implemented to support the development of budget airlines in the country, he said.
“Low- cost airlines fit the needs of the country’s economic development and the needs of the public,” he said.
The low-cost strategy will help major airlines to reduce their operating costs and cater to a market where an increasing number of Chinese tourists travel abroad, he said.
More than 83 million tourists traveled abroad for sightseeing, leisure and shopping last year, up from 16.6 million in 2002, according to official data.
But the profits of some domestic airlines were reported to be dropping this year, due to an economic slow-down and a weakening demand from business flyers, said Lin Zhijie, an industry analyst.
To make things worse, seven new high- speed rail lines have opened recently or are due to open, and more express train services have been started between cities farther apart, all of which are expected to take passengers away from the airlines, he said.
Li Xiaojin, a professor at Civil Aviation University of China in Tianjin, said developing more low-cost airlines could help carriers cope with the growing competition from high-speed railways.
“Budget airlines will be popular, as the country has more people in the middleand low-income groups,” he said.
Zhang Wu’an, spokesman for Shanghai- based budget carrier Spring Airlines, said the company welcomes the news, as it means more policy support for low-cost airlines.
“A tree does not make a forest. There is a chance that the new policy could increase market competition, yet the increase in the number of market players will also make it easier to seek more policy support,” he said.
Earlier this year, the civil aviation administration and the National Development and Reform Commission jointly issued a circular and scrapped the lower limit for prices that an airline can charge for tickets.
As for flight delays, Li Jiaxiang said flight delays will continue to be a major target of the administration’s work next year.
He said flight punctuality was increased by nearly 10 percentage points between June and November.
The increase came as result of various measures, including expanding an air route between Beijing and Kunming and asking planes to take off on time at eight big airports, regardless of the destination airports’ control orders.
The administration has also changed the way it defines whether a flight has left on time.
In the past, a flight was counted as punctual so long as the cabin doors were closed at the scheduled departure time.
As a consequence, even though airlines knew some flights would not be able to take off soon, they forced passengers to board planes on time and let them sit in the sultry cabin for hours while the plane sat on the tarmac.
Li said that now flights will be regarded as punctual only when the planes start to taxi on the runway at the scheduled time.