Spring Airlines Chairman Wang Zhenghua stated he expects the LCC to report annual growth rates of between 4% to 5% in 2011 but added the carrier’s fleet expansion plans has been slowed due to a shortage of pilots (AvBuyer, 08-Dec-2010). Mr Wang also stated the LCC plans to open three to four new Japanese routes in 2011. According to Mr Wang, Spring Airlines operates at an average load factor of 95%, which is 40% more than the industry average in China. Mr Wang also stated the carrier hopes to enter cooperation agreements with other LCCs in Southeast Asia but has no plans of taking part in the large aircraft market.
Spring Airlines targets 5% annual growth in 2011
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Spring Airlines seeks to redefine itself in a more crowded Chinese LCC market
The company folklore of the Chinese low cost carrier Spring Airlines has become entrenched in aviation history, with photos of Spring staff on duty trips sharing hotel rooms while eating instant noodles.
For the Chinese market this thriftiness, and regular candid interviews with billionaire founder Wang Zhenghua, became synonymous with the growing number of budget flights on Spring Airlines. The public became educated about China's only notable LCC, which was markedly different from the cookie cutter format of full service domestic airlines.
But the spectrum of airlines in China is widening and Spring, now under the leadership of Stephen Wang, needs to reassert its position in the Chinese market.
Mr Wang addressed CAPA's Americas Aviation Summit in Orlando in Apr-2017. There are new LCCs and airlines transitioning to LCCs with different service levels, making Spring wonder if it should be an "ULCC". The reality of a government orchestrated market means Spring needs to consider widebody operations for domestic trunk routes, and possible long haul flying. Spring also needs to diversify its presence: its home hub of Shanghai is high yielding but this has invited envy, and an aviation hub overhaul could mean that LCCs are moved to a new and remote third airport in Shanghai.
Fleet Report & Outlook 2017
Oriel reviewed its piece written in Jan-2016 and many of its thoughts panned out during 2016. In particular, the growing gap between the values of aircraft sold naked and those transacted with a lease in place. In Oriel’s opinion, this gap has reached unprecedented levels as new lessors and investors seeking yield have fuelled a value bubble for aircraft with leases attached.