Budget airlines accelerate development in second- and third-tier cities

Chinese and overseas budget airlines have geared up for developing the second- and third-tier markets in China.

China's tourism industry is in its golden era of development, while budget airline is in the infancy with huge development potential, and both Chinese and overseas budget airlines are to see rapid expansion, said Dai Bin, president of China Tourism Academy.

Statistics released by China National Tourism Administration show that 117 million Chinese residents traveled overseas in 2014 and their expenses on overseas tourism were around 140 billion U.S. dollars.

Overseas Tourism is the primary driving force for the development of budget airline, while the airlines have developed more inexpensive, quality international air routes.

Malaysia Airlines is a renowned budget airline in Asia and the company has entered 14 Chinese cities, while more than 10 are second- and third-tier cities. Malaysia Airlines has taken the second- and third-tier Chinese cities as the target markets. In the meantime, Chinese budget airlines, such as Spring Airlines, China West Air, China United Airlines, and 9 Air, have emerged in overseas markets, while the Spring Airlines has successfully entered into the Japanese, Thai, Malaysian markets.

Civil Aviation Administration of China (CAAC) issued in 2014 the Guidelines of CAAC on Boosting the Market Size of Budget Airlines and specified to release concrete reforms in the field of enterprise establishment, air routes, approval of charges, and budget terminals, in a bid to support the development of budget airlines.

Market research estimates that the market size of China's budget airlines will top 200 billion yuan by 2023, making the country a most important market of budget airlines in Asia.

Chinese tourists have been changing their way of traveling from group tour to self-guided tour, they no longer depend on group tours to get cheap air tickets, and the demand for budget airlines has increased.

Therefore, the competition among budget airlines must be intensive in China in the future, said Hu Yishan, senior research scholar of Nanyang Technological University in Singapore.