In China, Low-Fare Flying Is Seriously No-Frills

Spring Airlines gives new meaning to low-fare, no-frills flying.

For a one-way ticket from Shanghai to Qingdao, about the distance from Los Angeles to San Francisco, it charges as little as $12.50. You won’t get a bag of peanuts on the plane, but 50 cents will get you a pickled duck wing.

And don’t plan on packing anything heavy. Passengers are allowed to check bags weighing a total of 33 pounds, about a third of the limit set by most U.S. carriers.

Traveling on Spring makes Southwest Airlines, AirTran Airways and other U.S. budget brands seem like luxury carriers.

Since its debut in July, Spring has flown more than 200,000 travelers to 11 Chinese cities on its three, bright-green Airbus jets. The Shanghai-based airline hopes to have 50 planes in five years.

Private, low-cost carriers like Spring have been sprouting in China and across Asia amid fast-rising incomes and a boom in leisure travel. Companies such as Singapore-based Valuair and Malaysia’s Air Asia are taking on traditional carriers and making air travel accessible to tens of millions of people.

Nowhere is the opportunity as great as in China. Experts say fewer than 1% of the nation’s 1.3 billion people have stepped foot on a plane. Most travel long distance on trains that often are smelly and crowded.

Spring wants to make air travel routine in China.

For some routes, “we’re cheaper than the bus or the hard seats on the train,” said Spring’s chairman, Wang Zhenghua, 61.

The airline has won some converts.

Zhou Jianxin, a 25-year-old recent college graduate, took Spring’s flight from Shanghai to Qingdao last month to go home for the Chinese New Year holiday. It was his first time on a plane. He was so excited that he got to the airport three hours before the scheduled departure, only to face a two-hour delay.

Zhou asked for a window seat and frequently peered outside.

“It was so cool,” the stocky man with a soldier’s haircut said. “It was like riding a roller coaster when the plane was accelerating and taking off.”

For years Zhou had gone by train from Shanghai to his home in Shandong Province. As a student, he paid half price, about $6 for a hard seat. But it was a long 24-hour ride. When he flew last month, he didn’t get the best fare because of the holiday season. He paid $65 for a one-way ticket. But that was still 50% cheaper than the lowest fare available on other carriers.

“It will be great if Spring Airlines keeps offering cheap tickets,” he said. “I don’t want to take the train anymore.”

Whether Spring Air and its no-frills counterparts can succeed is another story.

In the U.S., aviation deregulation gave rise to budget airlines. In China, where the air-travel market is in its infancy, the rules are more restrictive and tend to favor three state-owned carriers that control more than 90% of flights.

Wang, Spring’s chairman, has pored over books on Southwest Airlines’ strategy and management, and he’d like nothing more than to duplicate its success.

“To be the Southwest Airlines of China, you can say that,” he said.

But it has been a turbulent ride for Wang and his airline.

Few in China’s aviation industry are happy to see the arrival of a budget flier. Not travel agents or other middlemen whom Spring would cut out with its online ticket sales. And certainly not the dominant, state-owned carriers that have had it their way for years.

Shortly after Spring’s launch, they complained to China’s aviation authorities that the upstart carrier had set prices so low that they were in violation of government price controls. That forced Wang to package some flights with hotels to give customers discounted tickets.

Some of Spring’s rivals lashed out even harder, halting long-running charter flights for Spring International Travel Services, the tourism company that Wang started 25 years ago, which is supplying $10 million in capital to launch Spring Airlines.

So far, the airline has been running at 95% of capacity, compared with 73% for the industry overall. But Spring also has had some start-up pains.

Its first flight from Shanghai to Wenzhou was scheduled to leave on a November morning. But the Airbus A320 never made it off the ground. The night before, maintenance crews spotted a crack in one of the windows on the used aircraft. With no other aircraft to use for a quick substitution, Spring Airlines canceled the flight, booked passengers on another carrier and covered the full-price fare of $95 a seat for a 50-minute flight.

The move was costly, but Spring gained some goodwill.

Bao Xiuming, a Wenzhou area resident, read about the incident in the paper and decided Spring was worth a try. He travels to Shanghai two or three times a month for his textile and home appliance businesses.

On a January afternoon, Bao, 48, boarded a Spring plane in Wenzhou for Shanghai. Every seat was taken. Four flight attendants passed out the lone frill: a 13-ounce bottle of water for each customer.

It was a white-knuckled, 45-minute flight. The plane was tossed up and down and seemed to be pushed sideways. The cabin was hushed.

Upon touching down at Shanghai’s Hongqiao International Airport, some passengers stood up to get out before the plane came to a complete stop. Bao said he had never been on such a bumpy flight. Still, he was thrilled to pocket the savings.

“I’ll probably fly more because it’s so cheap,” he said.

Spring is targeting businesspeople like Bao. But in today’s China, Wang doesn’t have the ability to adopt Southwest’s model.

The Dallas-based airline reduced hefty airport landing and gate costs by setting up in secondary airports. But China hardly has any such airports. In fact, there are just 140 airports in China, compared with more than 5,700 in the U.S., said Li Yanhua, assistant professor at Civil Aviation University of China.

Spring can’t operate on lower labor costs, either. Wang says there is a shortage of pilots in China, so he has had to pay more than the industry average salary of $1,250 a month.

Jet fuel and other material costs are controlled by the central government, which started allowing private airlines to operate only about a year ago.

Li estimates that 80% of an airline’s cost in China is beyond the company’s control. Nor can Spring count on the government’s support on issues involving ticket prices and flight routes. Li says China’s aviation authorities have tended to favor the state-owned carriers such as Air China and Chinese Eastern, both of which declined to comment.

Flying each of its airplanes frequently and filling most of their seats won’t be enough for Spring to survive, according to analysts, who say it will have to expand its fleet to 20 or more planes. That may take five years, Wang says, and it’s unclear how long the airline or its related company can continue to absorb losses. Spring International Travel Services, of which Wang is also chairman, operates 15,000 travel agencies in China and turned a handsome profit of $8.5 million in 2004. But Spring Airlines has been losing on average about $150,000 a month since August.

Some industry executives say China is simply not ready for a budget carrier.

Lan Shili, one of China’s richest entrepreneurs, who plans to launch a private airline in May, says Chinese air travelers are mainly businesspeople or government officials who consider flying a luxury. They don’t want to be shortchanged on things such as drinks on board, he said.

“As a customer, it doesn’t feel good,” Lan said, adding that his new company, Wuhan-based East Star Airlines, would aim to offer high-quality service at a competitive price.

Wang agrees that a budget airline may have arrived too soon for Chinese consumers.

At the moment, about 40% of his customers are buying their tickets online. The rest are booking them at travel agencies.

“Many don’t trust e-tickets,” says Wang Zhicheng, marketing manager at Jinjiang Travel in Shanghai. “They worry about paying for something without getting anything in their hands.”

Spring’s Wang expects the share of online purchases to grow and hopes Spring’s customers will start printing their own tickets.

Until then, Wang is cutting costs where he can. On board, employees have been told to gently discourage passengers from bringing meals to eat onboard or from sharing food with others, to reduce cleanup time.

At Spring’s headquarters near Hongqiao Airport, Wang moved out of his large private suite and into a 125-square-foot office that he shares with another executive.

“All the experts and insiders say a budget airline won’t succeed in China,” Wang said. “But if Western companies can manage it, why can’t the Chinese?”

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Times researcher Cao Jun in Shanghai contributed to this report.