Budget airlines to enter Chinese market
Yahoo | Jan. 23, 2006
It will take at least five years to realize a low-cost aviation market in China, said Mao Ang, an analyst with China Galaxy Securities.
Mao Ang was commenting on news that Tiger Airways, a budget airline in Singapore, is allowed to open two routes in China by April 2006.
One route is between Singapore and Haikou, the other is between Singapore and Shenzhen.
An insider of General Administration of Civil Aviation of China (CAAC) confirmed the news.
Tiger Airways will be second foreign budget air company entering China after Air Asia.
Insiders believe that the move wont impact domestic air companies, because the two routes approved by CAAC are vacant international routes of China.
However, if domestic air routes are open to those foreign cheap air companies, such as Virgin, Lufthansa and so on, domestic carriers will face survival problems.
China wont see cheap air market, unless the government could loosen air traffic management, break monopoly of jet fuel, lift control over air ticket price and increase second-grade airports. Anyway, it will take at least five years to complete it, Mao said.