Companies

Spring Air plans overseas JVs

By Wang Zhuoqiong (China Daily)
Updated: 2011-04-19 11:10

Spring Airlines will become the first budget airline in China to set up an overseas joint venture. Its proposed second route to Japan - between Shanghai and Takamatsu - was scheduled to begin on March 27 with four flights a week, but it was postponed because of the recent earthquake. [Photo / China Daily]

BEIJING - Spring Airlines, China's first budget airline, is hoping to set up joint ventures in Japan and South Korea to expand its presence in the neighboring markets, said the carrier's chairman of the board.

The Shanghai-based airlines, the aviation subsidiary of Shanghai Spring International Travel Service, will become the first budget airline in China to set up an overseas joint venture.

The company is also scouting for local partners in South Korea, Hong Kong and Macao, said Wang Zhenghua, chairman of the board of the airlines, on his personal blog last week.

The move is to grab more market share and ease bottlenecks, such as shortage of pilots, during its current fast development, Wang said.

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"To set up a joint venture in Japan, where pilots are relatively abundant, will boost business in Japan and increase the number of routes between China and Japan, and Japan and South Korea," he said.

But Zhang Wu'an, spokesman for Spring Airlines, told China Daily on Monday that the plan is still in its infancy and it is too early to reveal any details, despite the company's confidence in the Japanese market.

Zhang Lei, an aviation analyst at Citic Construction Co Ltd, said among international routes, competition on flights to Japan and South Korea is less fierce than those to the US and Europe, while flights to North Asian countries are still profitable given its short distance.

Zhang said that a local partnership will be a boon to a budget carrier such as Spring Airlines by providing more access to market resources and local customers.

On July 28, Spring Airlines launched its first international route, connecting Shanghai and Japan's Ibaraki Airport, about 80 kilometers away from Tokyo.

On Sept 28, the airline kicked off its route from Shanghai to Hong Kong.

Established in 2005, the budget carrier has a fleet of 22 Airbus A320 aircraft, with passenger occupancy of more than 95 percent.

Its proposed second route to Japan - between Shanghai and Takamatsu - was scheduled to begin on March 27 with four flights a week, but it was postponed because of the recent earthquake.

Additional routes to Honshu, Hokkaido, Kyushu and Shikoku are in the pipeline.

Other routes linking South Korea, Southeast Asian countries and Russia are also in the planning.

Given the frequent business and leisure travel between major cities in Japan and China, the popularity of such air routes make them stimulating investments, according to Spring Airlines.

Japan's leading air carrier ANA was reported by China Business News in February to be planning a budget airline joint venture based in Osaka by September, with investment from First Eastern Financial Investment Group in Hong Kong.