China Eastern 中国东方航空公司 , a partner in the much delayed Jetstat HK venture, is launching its own low cost carrier in the PRC.
In this ATW report China Eastern chairman Liu Shaoyong says “Low-cost carriers are challenging traditional network carriers with their unique business model and their growth has gained momentum in recent years. But LCCs only account for 7% of shares in terms of passenger boardings in China’s market, which is much lower than a 26% share in the global market on average. So there is big growth potential for China’s LCC market.”
That might sound familiar to anyone who has absorbed the Jetstar expansionary spiels in general and in relation to Hong Kong in particular in recent years.
The new airline is a conversion of China Eastern’s subsidiary China United Airlines to a single class tight fit format.
It has a fleet of 26 Boeing 737s and the parent company has a large order in place for more 737NGs and the the forthcoming new tech engine version, the 737 MAX family. The new LCC expects to start operations in the near future and have a fleet of up to 100 single aisle jets within five years.
Assuming Jetstar Hong Kong does start flying within that time period it may well compete head on with China Eastern’s wholly owned LCC. Then again ……