Business / Companies

Sharing a dream: China' s budget airline pioneer

(Xinhua) Updated: 2015-02-26 16:13

BEIJING - Packing two electric cookers and 20 kg of rice into his luggage, Wang Zhenghua starts his journey on a low-cost flight, heading to an international annual meeting of budget airlines in Singapore.

The president of China's first low-cost airline of Chunqiu always follows this routine to ensure his delegation of 20 young people has a good breakfast and, more importantly, travels cheaply.

Wang always takes a big delegation to such meetings so Chunqiu's young staff can mix with senior executives of other companies from around the world and learn from their experience.

"They are the future of China's low-cost airlines and they will continue my dream of enabling ordinary people to fly," he says.

They will also stay at a budget hotel.

"We must abide by the low-cost concept while we are promoting it to Chinese."

Stressful listing

That's despite the market value of Chunqiu Airlines passing 28 billion yuan (about $4.56 billion) in late February, and Wang's wealth being in the billions.

The previous month, the company became the first listed private airline on the Chinese mainland when it launched on the Shanghai Stock Exchange.

"It has been stressful since the short joy of its listing, despite being constantly congratulated when the shares hit the daily limit," says Wang.

A low-cost airline must constantly ensure safe and cheap travel by more effectively using every cent from the investors.

"It is a dream of millions of ordinary Chinese to fly somewhere new. We must strictly cut management expenses to make their dream true."

The 71-year-old's business empire was born shortly after China began its reform and opening up three decades ago. He quit his job as a government official in Shanghai and set up the Chunqiu travel agency in his 40s. Then, he started a charter flights business in his 50s. In 2004, he founded Chunqiu Airlines.

Massive market

"The top priorities for a low-cost airlines are safety and cost control," says Wang.

"Budget carriers must have the same safety standards as traditional airlines," he says. Chunqiu pays to ensure the safety of every aspect of flying, from buying and maintaining aircraft to training the crew.

On Feb. 10, Chunqiu received a new A320 liner, becoming a medium-size airline with a fleet of 50 aircraft. It is aiming for a fleet of 100 by 2018, which would make it a major airline.

In the developed market of the U.S. and other regions, low-cost flights account for up to half of all civil aviation passenger transport. In China, it is about 5 percent.

"The prospective market for budget flying is much more massive than the market for a limited number of wealthy people," he says.

He sees young workers buying cheap fares - 100 or 200 yuan - to visit their parents for short breaks, or white-collar workers taking their families on a foreign holiday for 1,000 to 2,000 yuan.

"More importantly, ordinary people, who had never imagined they would fly, are looking through the cabin window thanks to Chunqiu, " Wang says.

Flying stories

In the early 1990s, Wang began selling fares for major airlines. He learned about the costs and margins, enabling him to start the charter flights through his Chunqiu travel agency in 1997.

He once sent all the residents of a village in the eastern province of Jiangsu on a holiday to the southern island province of Hainan.

At the time, Chunqiu travel agency chartered aircraft from all the Chinese carriers, offering about 30,000 flights a year.

Wang saw clearly that high air fares stopped most ordinary people from flying.

"I started to present regular reports - 'Flying stories of ordinary people' - to the civil aviation authorities. Story telling is a magic way to express yourself and gain support," he says.

Delay troubles

But after becoming the first private airline in China in 2004, the first six years were "painful" .

"Chinese people were unused to low-cost flights, and often prejudiced."

Some passengers were sometimes furious the airline offered no free meals or drinks, or they had to pay for checked luggage.

Even worse were flight delays: "After a delay due to a rainstorm, some passengers lay down at the gate and others on the runway," he recalls.

That incident triggered delays of another four flights. More than 700 passengers were stranded and a total of 2,000 passengers were affected.

"I was so depressed by such incidents. All these things were covered in the air fare contract."

However, he is confident his low-cost airline is changing people's lives.

"Chunqiu and I are creating a business to realize that dream - a safe and affordable flight for massive common Chinese at least once in a lifetime."

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