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Chinese demand for budget flights increases

On July 2, China Eastern Airlines announced its plans to change its subsidiary China United Airlines into a budget carrier. This will be the first Chinese state-owned airline in the budget airline sector. The government issued guidelines in February to bring about an increase in low-cost air travel.

There is doubt that the expansion into low-cost carriers can be profitable; the regular airlines recorded declines in year-on-year profitability for first-quarter. It’s not clear right now what they can do to decrease operating costs; reducing in-flight service or increasing the number of passengers per plane are two options but when an airline goes too far with the cutbacks or cramped quarters, passengers complain.

The above article is a summary.  Please see the source article at Google News.

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