China’s Budget Airliners see Profits Soar

China’s budget air-travel market is rising to new heights.

Today, budget airliners account for about 7 percent of the country’s domestic air-travel market. That figure is expected to more than double by 2020, according to the aviation data and analytics company OAG.

Several budget airliners have maintained profitability while cutting down costs and offering passenger’s routes not covered by major airliners.

Xia Lili, marketing chief at a Shanghai-based software firm, has been enjoying the benefits of China’s budget airlines since 2010. By mandating company employees use budget airliners when available for business trips, the company has cut expenses by a fifth.

“Low-cost travel has become a life style,” Xia tells Reuters. “Many of my colleagues would start chatting about how to get those 9 Yuan ($1.41) or 99 Yuan ($15.48) special offer tickets.”

In several cases, passengers can save large sums by flying with a budget airliner as opposed to taking the same flight with a larger one. West Air, for example, offers a round-trip ticket from Chongqing to the popular southern resort of Sanya and a 3-night stay in a five-star hotel for just 999 yuan ($156), for bookings made in advance. According to Ctrip.com, the cheapest similar ticket offered by major airliners costs 770 yuan.

Budget airliners have also managed to keep prices down by engaging in some unusual savings practices.

Spring Air, for example, has taken out virtually all light bulbs in the corridor leading to chairman Wang Zhenghua’s office and staff must turn off the lights before calling it a day.

The company also reduced the size of its kitchen by a half in order to accommodate new seats as demand keeps rising.

On Thursday, Spring Air announced it had signed a $6.3 billion deal to buy 60 A320neo jets from Airbus.

Several airliners including Spring Air also stand out because they offer routes not taken by major airliners.

China United, for example, flies to nearly a dozen cities in Inner Mongolia or more than any other carrier including Air China.

The industry’s projected growth has even enticed major players such as China Eastern Airlines to convert units to budget airliners.

China has the world’s fastest-growing air-travel market. Its overall passenger volume of 392 million climbs at about 10 percent per year. Airbus predicts the industry will surpass the U.S. as the largest domestic air-travel market within 10 years..

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