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APRIL 2017

Week 16


Spring Airlines considers long-haul flights in 2018

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April 13th 2017

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Mainland China’s low-cost carrier wunderkind, Shanghai Hongqiao-based Spring Airlines, is considering its first long-haul low-cost flights in 2018, the airline’s deputy general manager, Jonathan Hutt, told the CAPA consultancy. Read More »

Spring’s ‘foreign hand’ said there was a "good business case" for the LCC to launch long-haul operations, but it first required a “very strong network” to do so cost efficiently, as well as conveniently, for passengers.

Hutt said the airline was “open” to exploration of interline and feeder agreements with other budget carriers along the lines the model Ryanair and Norwegian are launching in the European summer.

Spring wants to expand as fast as is possible, regulatory obstacles continue to slow its ascent, said Hutt, particularly the acute shortage of slots at some of the carrier’s main operating bases, including its Shanghai hub.

Founded in 2004 by legendary entrepreneur Wang Zhenghua, Spring became China’s first LCC when it launched operations with an A320 in July 2005 from Shanghai to Yantai.

The privately-owned carrier operates a fleet of 68 A320ceo, with three more due for delivery, on lease from AWAS, in 2018. In 2015, it signed its largest order to date: 45 A320neo and 15 A321neo for deliveries between 2019 and 2023.

Spring now serves 34 destinations, including Bangkok, Surat Thani, Singapore, Hong Kong, Phnom Penh and Tokyo.

The LCC set up its first subsidiary, Spring Airlines Japan, in 2014. Unlike its parent, the Japanese offshoot operates an all-Boeing fleet of four B737-800s. Spring Japan is capitalizing on the growing number of Mainland tourists to Japan and has grown at an annual rate of 59% since it launched.

Spring Japan has a network of four Japanese domestic routes and two international services: from its Narita base to Chongqing and Wuhan. CEO Wang Wei, one of Zhenghua’s sons, said Spring Japan planned to add flights from Tokyo to Tianjin, Harbin, Xian and Qingdao “in the near future”. Its Mainland parent already operates these routes.

At Spring’s Shanghai headquarters, a leadership change is underway. Founder Zhenghua is handing over the Spring Airlines business to his other son, 47-year-old Wang Yu. Zhenghua will stay on as a director to Spring’s board.

Before he announced his retirement, Zhenghua’s China Spring Group signed several strategic deals, including a cooperation agreement with Mainland online retail giant, Alibaba Group. The partners will cooperate to expand ticket sales, destination marketing, loyalty programs, IT and data storage, as well as order and payment transaction infrastructure.

Spring Group also has holdings in tourism, hotels and investment. The Alibaba Group is China's largest online commerce company whose interests include online retail, online payment facilities and cloud computing services.

Spring will not be China’s first long-haul LCC. HNA Group’s Lucky Air is set to take that title.The budget carrier will launch long-haul flights from its Kunming Changshui International Airport base to Moscow Domodedovo Airport on June 12.

In March, Lucky Air received its first wide body, an A330-300 from parent Hainan Airlines. It is flying on trunk routes between Kunming, Beijing, Shanghai and Guangzhou before it shifts Kunming-Russia.

The airline told FlightGlobal in February it planned to add three A330s to its fleet this year. It will source the other two jets independently of Hainan Airlines and probably operate them in an all-economy configuration rather than a business-economy layout.

When the budget carrier first mooted long-haul flights in 2016, it said Los Angeles and destinations in Europe were shortlisted. Parent Hainan has since launched flights to Los Angeles from Changsha, Chengdu and Chongqing. No airline offers a nonstop service between Kunming and the U.S. West Coast.

Lucky Air is also eyeing either the A350 or the B787 for its long-haul growth. Parent HNA has significant orders for both models. The airline plans to have a fleet of 120 aircraft by 2022, including 20 wide bodies. It has 11 A320 Family and 32 B737NGs aircraft.

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