Spring Airlines is keeping a keen eye on China’s full-service carriers, as some attempt to enter the low-cost space as part of the government’s push to develop the sector.
Speaking on a panel discussion at the Routes Asia Strategy Summit in Kunming, its branding and strategy director Jonathan Hutt says new low-cost entrants look to be targeted at developing the country’s secondary and tertiary cities, and can be “quite complementary” to its full-service parent’s offering.
Hutt says it will be interesting to see how the low-cost subsidiaries will be branded, and how they will negotiate for slots. A low-cost arm that is “too-related” to the parent could result in strong consumer expectation of the brand.
He is also keen to observe how much independence the low-cost units will garner, and whether there will be any cannibalization of the parent’s network.
“For China United we have to see how it’s going to tap on China Eastern’s resources, and for West Air how they will add to the existing Hainan group. I’m looking forward to see how that plays out,” says Hutt.
Hainan Airlines and China Eastern are two Chinese carriers which have converted their subsidiaries into low-cost operations, since the government started actively promoting the development of LCCs in response to a growing number of such foreign operators flying into the country.
Source: Cirium Dashboard
