China's Spring Airlines gets nod for int'l expansion

(Xinhua)
Updated: 2009-07-30 13:29

SHANGHAI: Spring Airlines, one of China's four major private carriers, confirmed here Thursday that the company was granted approval from the General Administration of Civil Aviation of China (CAAC) to operate certain international air routes.

This makes Spring Airlines the second private firm allowed by CAAC to explore the international market.

Another private airline, East Star, based in central China's Wuhan City, won the approval two years ago, but the company was ordered by CAAC to suspend flights in March because of prolonged financial and management problems.

"We just got the approval. It still takes time to design specific routes, flight schedule and pricing. International business is a new field for us. We still need to study CAAC's regulation," said Wang Zhenghua, chairman of Spring Airlines.

He said according to the approval, the company can explore the air market on short-distance routes linking China's mainland with Hong Kong, Macao and neighboring countries, like Japan, South Korea and Russia.

Spring Airlines, found in 2005, became the third private airline in China, after Okay Airways and United Eagle Airlines. It now has a fleet of 13 Airbus 320 passenger jets, flying on some 30 domestic air routes.

Wang said the company has aimed to boast a fleet of 100 planes by 2015.

"To reach the objective, we need huge a capital investment. The company is planning a stock listing on the Shanghai Stock Exchange next year," he said.

Zhang Qi, an aviation industry analyst with the Dongfang Securities, said by entering the international market, Spring Airlines can expand its business by taking advantage of booming tourism between Chinese mainland and the neighboring regions.

Spring Airlines chairman Wang said the company aims to be a low-cost air carrier to provide domestic passengers with more diversified choices on travel.

"We will fill a niche market rather than competing with big airlines," he said.

Spring Airlines' report in the first half year showed it handled 1.6 million passengers in the first six months, 40 percent more than the same period of last year. Its revenue during the preriod rose by 20 percent to reach 894 million yuan (US$130 million).