Spring Airlines News Thread

[Pieter C. 5]

China Fines Low-Cost Airline For Cheap Tickets

 

December 18, 2006

Chinese authorities have fined a low-cost airline almost USD$20,000 for selling tickets for the equivalent of 13 US cents in a promotion, saying they broke national pricing rules, a newspaper said on Monday.

 

Spring Airlines, set up last year by travel agent China Spring International, sold more than 400 tickets on a new route between Shanghai and the northern city of Jinan for just 1 yuan (USD$0.13), the Beijing Times said.

 

But that went against a 2004 rule -- designed to help carriers' bottom lines after a vicious price war -- that the maximum discount an airline can offer is 45 percent off a government-set base price, the report added.

 

A standard one-way ticket between Shanghai and Jinan costs CNY760 (USD$97), excluding tax and fuel surcharge.

 

The Jinan government said it would fine Spring Airlines' local travel agent branch CNY150,000 yuan (USD$19,160) as a punishment, though the company denies wrongdoing and will appeal, the newspaper said.

 

The case underscores the difficulty facing Chinese low-cost airlines, which are trying to model themselves on carriers such as Ireland's Ryanair in bringing cheap no-frills travel to the world's most populous nation.

 

China's airline industry is dominated by three main state-run carriers, which a clutch of low-cost airlines are trying to compete against.

 

(Reuters)

 

[Pieter C. 5]

Spring Airlines Discusses Equity Stake Sale

 

December 28, 2006

China's Spring Airlines is in talks with and others to sell stakes as the privately owned carrier looks to outside capital to fund expansion, two sources familiar with the matter said on Thursday.

 

The 17-month-old budget carrier has got initial approval from the government to buy 10 single-aisle Airbus A320 aircraft and hopes to raise roughly CNY3 billion yuan (USD$384 million) via share placements and an initial public offering to help foot the bill, a source at the airline said.

 

"We have discussed share placement deals with several potential investors including Citigroup," the source said.

 

"We want to sell no more than 20 percent to one or several investors. Talks with Citigroup have passed the initial stage."

 

Another industry source said the talks between Citigroup and the Chinese no-frills carrier could possibly lead to a stake purchase.

 

Citigroup's spokesman in Hong Kong declined to comment.

 

China has become a magnet for global investment firms and private equity funds, which are flocking to cash in on the country's breakneck economic growth.

 

Unlike larger rival China Eastern Airlines, which wants to bring in Singapore Airlines as a strategic investor, Spring Air prefers financial investors, which would most likely choose to cash in when the carrier floats its shares.

 

The Shanghai-based carrier hopes to complete the share placement deals before a stock market listing envisaged for 2009, one executive said.

 

Spring Air operates a fleet of four leased A320s serving over a dozen domestic routes.

 

(Reuters)

 

I bet Chairman Mao is turning in his grave

 

[Pieter C. 5]

East Star Airlines, Spring Airlines stand out among China's struggling LCCs

 

Wednesday May 23, 2007

While several Chinese low-cost carriers have struggled, newcomers East Star Airlines and Spring Airlines have started strong.

 

East Star reported net earnings of CNY11.4 million ($1.5 million) on CNY281 million in revenue in its first year of operation, while Spring posted a CNY30 million profit in its recently completed second year.

 

Industry analysts attributed the pair's success to an "air travel plus tourism" operating model--both launched travel agencies designed to attract passengers. Recently East Star, which operates three A319s at an average 83.1% load factor, applied to CAAC to fly internationally. "We plan to open new routes to Hong Kong and Macau and some international routes to Southeast Asia as we have travel branches in these destinations, so we will have no problem attracting passengers," MD Zhou Yongqian said. The airline intends eventually to list on an overseas stock market, he added.

 

Generally speaking, China's LCCs are having difficulty building up steam. A dearth of attractive slots and difficulties in acquiring new aircraft (orders must go through the government) and finding pilots are among the most significant hurdles cited by industry analysts. Average LCC fleet size is 3-4 aircraft.

 

In China, approximately 70% of commercial traffic is centralized in large cities like Beijing, Shanghai and Guangzhou, where airports are nearly saturated and unavailable to newer LCCs. In addition, a shortage of 8,000-10,000 pilots is forecast in the next five years, a concern for carriers that have trouble competing with the majors for new hires.

 

Despite those problems, Spring Airlines Chairman Wang Zhenghua is confident LCCs have a place in China's future. "Our target is to make more Chinese people have a chance to enjoy air travel," he said.

 

 

[Y. J. Foo 0]

China's Spring Airlines seems to have outdone Ryanair in terms of trying to push the fare lower... :lol: :rofl:

 

Spring Airlines considers selling standing-room tickets

2009-06-26 15:25 BJT

 

If you think legroom is not enough, then think whether "standing-room" might be for you. China's first private airline is considering selling standing-room tickets. The firm says it could submit the revolutionary idea for aviation regulator for approval within the year.

 

China's Spring Airlines says it first initiated the standing ticket concept in the beginning of this year. The carrier only has 13 planes, which are not capable of coping with the surging passenger volume and new flight routes.

 

Zhang Wuan, Spring Airlines said "The process of plane making is really long. We already ordered 14 new jets. But some of them will only be delivered next year. And you have to wait for at least 5 years to lease a plane, and it is also very expensive."

 

The upright seating jet could accommodate 40 percent more passengers, compared with traditional plane. It could also help airlines cut 20 percent costs, while lowering airfares for consumers.

 

Zhang Wuan, Spring Airlines said "It's just like bar stools. The the safety belt is the the most important thing. It will still be fastened around the waist."

 

Airbus has been quitely pitching the standing-room-only seating option to Asian carriers for a few years. The Chinese aviation regulator requires that passengers are secured to their seats for take-off and landing.

 

Some industry insiders believe the standing seat configuration still needs further regulatory examination before becomes a reality.

 

Editor: Xiong Qu | Source: CCTV.com

 

I personally think that's not gonna happen though...

[Li Ren 2]

Haha,if there is turbulence,those who are standing will be 'dancing' then

[Azlan A. 0]

if this happen here.. well, u can hear someone shouting:

"masuk lagi, masuk! dalam lagi, dalam! dalam banyak kosong lagi!! KLIA, penuh jalan terus!"

[C.Foo 3]

Wow the Airbus is becoming a real bus. I can't wait for the children to say look mummy its a bus that flies.

[Tony 1]

nippy little idea to make flying even CHEAPER!

[Mohd Suhaimi Fariz 2]

Virgin Blue did this as an April Fool's joke. But if this is real...what a joke!

[Naim 6]

On your feet ... flying at 30,000 feet

By Dan Reed, USA TODAY

 

The next time someone jokes about planes being so full that airlines will start selling standing-room tickets, don't laugh.At least two carriers, one in Europe and one in Asia, are seriously considering it.

 

Spring Airlines, a 4-year-old carrier that calls itself China's first low-cost airline, is seeking permission from that country's aviation regulators to reconfigure its planes to allow some stand-up "seats." Standing passengers would pay less than their conventionally seated fellow travelers.

 

The idea may not be dismissed out of hand by Chinese regulators because it was suggested by China Vice Premier Zhang Dejiang, according to Air Transport Intelligence, a website that focuses on global aviation industry news.

 

Meanwhile, Ireland's Ryanair, arguably the world's most innovative low-cost/low-fare carrier, says it, too, will sell standing-room-only tickets if the Irish Aviation Authority will change its safety regulations.

 

Michael O'Leary, Ryanair's chief, suggests standing passengers could be safely strapped to stools or railings.

 

The idea isn't that far-fetched, considering O'Leary's history. Earlier this year, O'Leary said he would like to charge passengers to use his planes' restrooms, and floated the idea of charging overweight travelers more to fly.

 

O'Leary has pioneered a number of cost-saving steps, including buy-on-board food, and beginning this summer, the elimination of airport check-in counters.

 

Although there are plenty of copycats in the airline industry, travelers in the USA aren't likely to get the option of flying on their feet any time soon.

 

"The regulations ... are very specific," says Les Dorr, a spokesman for the U.S. Federal Aviation Administration that regulates air travel. "Everybody above the age of 2 has to have a seat or a berth."

 

The legal term "berth" likely dates to the era of piston-engine planes that offered sleeping berths for cross-country flights.

 

But that antiquated legal language isn't likely to offer a loophole to airlines interested in packing more people aboard their flights by strapping them in standing up, Dorr says.

 

"It's probably a stretch to say that leaning against a rail or a stool would be a 'berth,' " he says. "Clearly, the intent of the law is that everybody over the age of 2 has to have a seat."

 

From an economic standpoint, the concept has legs in an industry trying to cut costs.

 

Removing seats to accommodate standing passengers could increase capacity on domestic flights up to 50%. Even if standing passengers paid lower fares, the result could be an increase in revenue per flight. It also could let airlines lower costs by allowing them to offer fewer flights and employ fewer workers.

 

Find this article at:

http://www.usatoday.com/money/industries/travel/2009-07-06-standing-room-flying_N.htm

[Waiping 12]

What about outside, like on top of buses or trains?

[alberttky 0]

Shanghai-based Spring Airlines, the most successful Chinese low-cost carrier, is preparing to launch a carrier in Japan to gain a deeper foothold in the Japanese market.

 

Spring spokesman Zhang Wu’an said the carrier has registered a company in Japan; however, since foreign investors can hold no more than a one-third stake in a Japanese airline, it is looking for a Japanese partner. Zhang said Spring is negotiating with potential investors in the new entity.

 

According to Zhang, Spring also plans to explore other international markets. To that end, it will open new routes to Thailand and South Korea next year.

 

Spring, which has become one of the fastest growing carriers in China, is expected to report a higher net income in 2011 than the CNY460 million ($72.6 million) net profit it earned in 2010. The carrier is moving forward with an IPO, which is scheduled to launch on the Shanghai Stock Exchange next year, to fund fleet expansion.

 

Spring operates a fleet of 27 Airbus A320s and plans to expand to 50-60 aircraft by 2015.

 

http://atwonline.com/airline-finance-data/news/spring-airlines-launch-carrier-japan-1206