* Threshold to be lowered to establish new budget carries
* Airport charges set to be cut at lower-tier airports
* Local governments encouraged to build new airports
BEIJING, Feb 28 China's aviation authority on
Friday pledged to promote the country's fledging budget airline
industry with supportive policies, a move industry observers say
could lead to a boom of low-cost air travel in the world's most
The Civil Aviation Administration of China (CAAC) said in a
statement published on its the website that it would lower the
threshold to establish new budget carries, simplify approval
procedures and cut airport charges in lower-tier airports.
CAAC also said it will encourage local governments to build
new airports or convert existing facilities to target low-cost
carriers, while continuing efforts to lower import tariffs for
China's airline industry has long been dominated by state
carriers, led by Air China Ltd , China
Eastern Airlines Corp Ltd and China
Southern Airlines Co Ltd , which receive
the lion's share of the country's most lucrative routes and the
best take-off and landing slots at airports.
That is starting to change. Last year, privately-owned
Juneyao Airlines setup a budget airlines with several other
partners, while HNA Group converted subsidiary West
Air into a budget carrier. China Eastern also is converting its
Beijing-based subsidiary China United Airlines into a low-cost
"More new entrants will come to the market once CAAC issues
favorable policies," said Gao Liangyu, an analyst with Huatai
Securities Co. "China is the most populous country in the world
and there is plenty of room for budget airlines,"
China's longest established budget carrier is Shanghai-based
Spring Airlines, which started operations nearly a decade ago.
Company chairman Wang Zhenghua told Reuters earlier this month
the airline is set to make an order for up to 30 Airbus (AIR.PA)
A320 aircraft worth $3 billion at list prices as the carrier
increases its routes.
In November, CAAC indicated its support for low-cost air
travel when it relaxed its airfare restrictions for the first
time in nearly a decade by allowing airlines to set prices as
low as they see necessary on 31 domestic routes.
(Reporting by Fang Yan and Matthew Miller in BEIJING; Editing
by Matt Driskill)