China Eastern Airlines has become the first of the country’s big three carriers to launch a budget airline, in a move that may accelerate the sector’s development in northeast Asia.
Shanghai-based China Eastern announced yesterday that it had decided to relaunch a subsidiary, China United Airlines, as a budget carrier.
Beijing-based China United, which plans to base itself in an airport under construction south of the capital, will more than triple its existing fleet to 80 aircraft by 2019.
China Eastern’s two biggest rivals, Air China and China Southern, have yet to launch budget carriers despite steps by China’s aviation administration to encourage their growth.
China United operates a fleet of 26 Boeing 737s, which it plans to increase to 31 by the end of the year. But some analysts cautioned that it would take years for China’s budget airline industry to develop.
China’s budget carriers include small players such as Qingdao Airlines and Zhejiang Loong Airlines.
China Eastern has been trying to establish a joint venture budget carrier in Hong Kong with Jetstar, the budget offshoot of Australia’s Qantas Airways, and Shun Tak Holdings, a conglomerate controlled by Macau gaming magnate Stanley Ho.
But the plans have been delayed by objections from Hong Kong’s flag carrier, Cathay Pacific. China Eastern said that It remained confident that Jetstar Hong Kong would win approval.