Spring Airlines is due to make a large purchase for new narrowbody aircraft, including the re-engined Airbus A320neo, as part of a plan to grow its fleet to 100 jets by 2018, its chairman Wang Zhenghua tells Flightglobal.
Despite the increased competition it expects as a result the Chinese government's push to promote the development of low-cost carriers, Wang believes the policy changes will also move Spring forward with its fleet expansion plans.
Spring, which operates 40 A320s mostly on domestic routes, has for years faced difficulties in getting approvals for the purchase of more aircraft to meet its expansion needs.
"China's civil aviation authorities' support policy for LCCs is expected to have a positive impact on the introduction of more aircraft into our fleet," Wang adds. The Chinese government has said that it will introduce measures including lowering the barriers to entry for setting up new budget operations, and also to make aircraft purchasing easier.
He concedes that the government’s push to develop the low-cost industry in the country will, however, mean increased competition for Spring, which has for years managed to be the only budget operator in China.
“With more LCCs, Chinese passengers will also have a better understanding of the LCC operating model, which is good news,” he says.
Furthermore, LCCs only take up a five percent share of the market in China currently, far below the 80% marketshare budget operators in Europe and America have on routes under three hours, says Wang.
He expects the budget segment to grow as more Chinese low-cost carriers enter the market, and the prospects for LCCs in Northeast Asia also to remain bright.
Wang adds that Spring is also able to stay ahead of the curve with 50% of its bookings now done through mobile devices, while its competitors are only just starting to sell tickets online. It also has a strong presence in the social media world.
Spring had initially planned to expand to a fleet of 100 aircraft by 2015, but this has been stalled as authorities have been reluctant to grant approval. It is a must for Chinese carriers to first seek approval from the local authorities before they can place aircraft orders.