Low-cost carriers a rising force in China’s aviation market

Associated Press

Singapore, January 19:

Low-cost airlines will likely see business soar in the next decade in China — Asia’s biggest domestic air travel market — finance company MasterCard International said in a report released today.

About 70 per cent of China’s 780 domestic routes are suitable for low-cost carriers, but the country’s aviation industry has yet to capitalise on its potential, stated the report, one of a series the company has released on Asian business trends. China has a large airspace, a massive domestic market and easy connections with the rest of Asia, the report stated. “The real driver of change in the low-cost carrier industry is China,” Yuwa Hedrick-Wong, MasterCard’s economic adviser for the Asia Pacific region, said at a news conference on the report.

“When China starts to take the lead, the region will follow,” Hedrick-Wong said. The report estimated that low-cost carriers will account for 25 per cent of the growth in air travel by 2013. But it also pointed out numerous problems, chiefly a lack of basic transport infrastructure that is hindering investment in airlines, as well as an overly regulated market.

China has been on an airport-building binge and recently began accepting applications for new, privately owned budget airlines — but low-cost air travel remains in its infancy. “We are likely to see movement within China’s low-cost carrier industry within the next 10 years,” Hedrick-Wong said.