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Budget airlines coming to China
(Agencies)
Updated: 2005-01-20 09:36

Low-cost airlines will likely see business soar in the next decade in China -- Asia's biggest domestic air travel market -- finance company MasterCard International has said in a report.

Low-cost air travel in China still remains in its infancy.

About 70 percent of China's 780 domestic routes are suitable for low-cost carriers, but the country's aviation industry has yet to capitalize on its potential, said the report, one of a series the company has released on Asian business trends.

China has a large airspace, a massive domestic market and easy connections with the rest of Asia, the report said.

"The real driver of change in the low-cost carrier industry is China," Yuwa Hedrick-Wong, MasterCard's economic adviser for the Asia Pacific region, said at a news conference on the report, Wednesday.

"When China starts to take the lead, the region will follow," Hedrick-Wong said.

The report estimated that low-cost carriers will account for 25 percent of the growth in air travel by 2013.

But it also pointed out numerous problems, chiefly a lack of basic transport infrastructure that is hindering investment in airlines, as well as an overly regulated market.

China has been on an airport-building binge and recently began accepting applications for new, privately owned budget airlines -- but low-cost air travel remains in its infancy.

"We are likely to see movement within China's low-cost carrier industry within the next 10 years," Hedrick-Wong said.

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