China's 19 new passenger airlines will be mostly full service and along the east coast

One year ago in Nov-2013 China announced the start of a new framework to cultivate new airlines and specifically LCCs. The objectives were to re-stimulate market growth by introducing new types of airlines into the heavy state-owned, and until-now inefficient, airline secotor. A further objective was to bring the humming aviation scene on China's east to western areas that are centres of economic policy drives.

As part of this, a de facto moratorium on new airlines was formally lifted. This has led to a rush of start-up activity. The number of new passenger airlines that have recently launched, plan to or are in formation has reached 19, according to CAPA's compilation based on public statements. But only two airlines - 9 Air/Jiu Yuan and an unnamed carrier in Zhengzhou - are so far planning to operate as LCCs. This reflects hesitation to innovate but also a policy framework that is not yet entirely conducive to LCCs.

There is a better turnout of airlines forming in China's west as well as previously ignored northeast corridor. But there is still a heavy eastern bent to the start-ups, with some planning to launch passenger service in first tier cities like Guangzhou, Hangzhou, Shanghai and Shenzhen.