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Chinese market open for budget airlines

www.chinanews.cn 2005-02-02 12:21:21

China news com. Feb.1 - A well-informed insider from the Transport
Section of the Department of International Cooperation under the General
Administration of Civil Aviation of China (GACAC) disclosed that Thai Air
Asia (TAA) has become the first budget airline company to obtain approval
for flying into China's airspace. It means that GACAC has opened the door
for overseas budget airline companies to enter the China market.
The insider said that TAA could operate three routes from January 1st
2005 to December 31st 2007, namely from Thailand to China's Chengdu,
Kunming, and Xiamen. The first flight from Thailand's capital Bangkok to
China is expected to take place in April. TAA will have to reapply to
GACAC if they wish to continue operating the airlines in China after
December 31st 2007.
Some experts opined that GACAC has to consider the market scale,
transportation volume, and future market demand when it allows overseas
budget airlines to operate in China. In particular, for the major routes,
the impact of overseas budget airlines on other domestic airlines has to
be considered carefully.
Currently, China Eastern Airlines, Air China, and China Southern Airlines
are not operating many flights to Southeast Asia. Furthermore these
routes are not major routes, and TAA's entry into China will not affect
these companies much from an overall perspective. However, market
competitiveness will be more intense for certain specific routes.
Following the opening of the door for budget airlines to enter the
Chinese market, budget airlines from the United States and Europe will be
applying to enter China as well, which will cause competition for
international routes to heat up day by day.

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