China\'s Civil Aviation Administration Lifts Limits on Low-Budget Airlines

Published Date : Feb 07, 2014

China\'s Civil Aviation Administration has announced new rules that are likely to present profitable opportunities for low-cost carriers. The authority has issued a notice that cancels lowest price limits that airlines previously had to adhere to. With this, airlines can now offer their customers higher discounts, in the hope of adding to business volumes as more people consider flying. 

This move would also result in the emergence of more budget airlines in China. Hitherto, the highest discount that airlines could offer customers had been 45%. On similar lines, the Chinese administration has been encouraging large Chinese airlines as well as private capital investment firms to pump more money into the budget airline segment in China.

In addition to this, the Chinese aviation authority has reportedly been working on formulating policies that will boost growth in the budget airline sector. These policies will likely support activities such as airplane purchases and air route applications.

Till date, the low-budget airline sector in China had been unable to take off in the true sense because of factors such as high prices of jet fuel, route applications, and airplane purchases. Now that the sector has support from the authorities, the situation could well change for the better.

At the same time, it would be imperative for authorities to formulate a set of standards for budget airlines, given that this sector has thus far remained underdeveloped in the China. 

Currently, only two airlines in China fall under the category of low-cost carriers. They include the West Air Co Ltd and Spring Airlines Co Ltd, which is the largest low-budget carrier currently in China.