News
Shanghai Airports: LCCs important to hubs
Airport operator and Spring Airlines share goals but differing views.
October 25th 2019
As Shanghai considers options to expand capacity, one of many scenarios to be evaluated is the construction of a low-cost airport in greater Shanghai. Read More » Geography determines a third Shanghai airport will have to be some distance from the city, disadvantaging low-cost carriers like Shanghai-headquartered Spring Airlines, which has partially succeeded because of the eastern city’s high yields.
So it was a relief for Spring Airlines to hear the Shanghai Airport Authority values and embraces carriers such as the privately-owned LCC.
“LCCs are an important part of a hub airport,” Shanghai Airport Authority Strategic Planning Manager, Ding Jingzhu, told the China Low-Cost Carriers Summit, organised by Summit Asia, in Shanghai this week.
Ding dispelled the notion LCC passengers were less valuable contributors than full-service travelers to the non-aeronautical revenue airports increasingly rely on. “LCC passengers have strong purchasing power. We should redesign and redefine that model because shopping is very important for LCC passengers,” he said.
LCCs also provide hub benefits, such as transferring passengers. Ding said 13% of Spring Airlines passengers at Shanghai Pudong transfer to another flight, usually a Spring one, but in the future the LCC could transfer more passengers to other airlines. “Legacy airlines need LCCs,” Ding said.
But the airport and the LCC seemed to disagree about the facilities that should be available to LCCs. “The existing terminal can serve full-service carriers and LCC passengers,” Ding said. He pointed to KLIA2 in Kuala Lumpur, a low-cost terminal that was expensive to build and was not regarded as totally successful by leading LCC, the AirAsia Group.
Spring Airlines vice president, Zhang Wu An, said the “Hongqiao terminal one cost is very high”. Zhang wants investment that will improve the passenger experience, mainly in technology like self-boarding. “We should consider passengers’ needs and demands,” he said.
Zhang added Spring had saved, on average, 10 minutes of taxiing time by optimising Pudong’s aircraft parking positions. More development will come to Pudong with future high-speed rail integration, summit delegates were told.
