China Eastern Airlines GM Ma Xunlun stated the carrier may establish a mainland China-based LCC if its JV LCC with Qantas, Jetstar Hong Kong, proves to be successful, stating “China Eastern has always been trying to enter the low-cost airline market amid rapid growth of the budget carrier sector around the world”. According to reports from China Daily, Shanghai Daily and Yicai, Mr Ma said the carrier may also cooperate with Qantas on the potential new LCC as it seeks to be the first major Chinese carrier to tap China’s LCC market. Mr Ma stated there is no time frame for the new LCC as the carrier’s main priority at the moment is to focus on the development of Jetstar Hong Kong, a major test bed for the carrier. Mr Ma, however, warned there are many hurdles that LCCs face in mainland China “low-cost carrier actually has to bear high costs on fuel, salaries and various operational charges in China.” Commenting on the development of Jetstar Hong Kong, Mr Ma said it hopes to launch Jetstar Hong Kong in 2H2013 adding its fleet target of 18 aircraft by 2015 has not changed, although it will be adjusted on a per year basis depending on the timing of approvals by the Hong Kong SAR Government.
China Eastern Airlines considering establishing mainland China-based LCC with Qantas
You may also be interested in the following articles...
China and Australia remove airline growth restrictions as China cautiously embraces open skies
China has agreed to liberalise passenger flights and remove capacity restrictions with Australia, its largest outbound long haul market after the United States. This is a relief to Chinese airlines, which face bilateral constraints in North America and Europe. The result is already evident as Chinese airlines deploy more capacity and larger aircraft to Australia.
In North American and European markets the local governments hold back on traffic right expansion (let alone open skies). But for Australia it was the Australian government, which signalled some years ago that it wanted to liberalise once China was ready – a time that has now come.
Australia's view was progressive and detached from bygone days of national carrier interest; Chinese airlines hold 90% of the market to Australia. Elsewhere many governments still hold back on Chinese traffic right expansion so their local airlines can continue to grow. There are 15 Chinese airports that have nonstop flights to Australia with a total of 27 airport pairs – figures that should expand in 2017 as the market evolves further with the Virgin Australia-HNA partnership.
CAPA Aviation Outlook 2017: Australia & New Zealand - amid global uncertainty, China again the rock
As 2016 draws to a close, CAPA - Centre for Aviation reviews the past year for aviation in the Australia Pacific region and what lies ahead for 2017.
In an uncertain world, from the disruption of Brexit to the likely confrontationalist attitudes of a Trump administration, and instability in many parts of the world, from Russia to the Middle East to Asia, Australia and New Zealand's aviation sectors are mostly in rude health, with liberal policy settings and globally high service levels. Yet each of the main airlines in Australia and New Zealand still relies heavily on its domestic markets.
China has asserted its relevance in world aviation recently and over the past couple of years its airlines have rapidly expanded into the two south Pacific countries. With 2017 declared the ‘China Australia Year of Tourism’ by China’s tourism bureau, continued substantial activity can be expected in that market.
Qantas' 787 Perth-London service plans have made clear the role of the long haul medium size equipment, but aside from the innovative elements, retaining a cost focus and keeping the basics under control will be key to the future.