Spring Airlines embarks on pan-Asian strategy with establishment of Japanese subsidiary

Spring Airlines, China's largest and most successful low-cost carrier, will follow in the footsteps of AirAsia, Jetstar and Tiger Airways in establishing a pan-Asian strategy to have subsidiaires outside its home market. The first will be in Japan. While Japan already has local AirAsia and Jetstar subsidiaries and Spring's strategy may appear to be merely copying other carriers' strategies, Spring's strategy is guided by other objectives.

Airlines in mainland China are heavily regulated and direct competition is limited. Establishing a foreign subsidiary, however, will give Spring more transparent regulatory frameworks to work with in order to serve international Chinese routes. The foreign bases also allow flights to third countries. With China to become the largest market for LCCs, Spring has the potential to capitalise internationally on its local awareness as well as offer access to China's domestic network, which remains something of a holy grail for AirAsia and Jetstar. But Spring will face the challenges of sophisticated IT and ancillary revenue, which AirAsia and Jetstar have a large start on.