Economy

Markets

Industries

Insights

Reports

Events

Transportation: Budget airline moves to slash baggage limit

By Qian Yanfeng (China Daily)
Updated: 2008-09-04 12:54

China's only budget carrier Spring Airlines wants to charge passengers for check-in or carry-on baggage exceeding 5 kg.

The airline has applied to the air transport authority to start charging the fee, but did not disclose the amount.

It said earlier this week it hopes the proposed charge will encourage passengers to travel light and help the airline to save fuel, which accounts for about 50 percent of its operating costs.

Spring also said increased fuel prices are hurting revenue. It posted a net profit of 80 million yuan for 2007.

Zhang Lei, a spokesman for Spring Airlines, said the proposed charges would be paid by all passengers with bags that weigh over 5 kg - including check-in luggage.

Major Chinese airlines allow a standard 20-kg baggage allowance in accordance with Civil Aviation Administration of China regulations.

Industry insiders noted that Spring's move is yet to be approved, and other Chinese carriers haven't indicated they will follow suit.

China's private and State-owned airlines are feeling the pinch amid weakening demand and rising costs, despite the recent drop in oil prices.

Carriers are trying to find ways to keep costs down as they brace for an expected downturn in the aviation industry.

"Fewer people are traveling at the moment after the snowstorm and earthquake in the first half, followed by the Olympics," Li Shurong, an analyst from Shenyin Wanguo Securities, said.

Spring has also scrapped its 30-yuan discount on online flight bookings.

"Spring's occupancy rate is now at 95 percent, but we had to lower our fares by 20 percent," Zhang said, adding that the airline's current fares are the lowest since its maiden flight in July 2005.

Last month, China Southern Airlines, Air China and China Eastern Airlines posted dismal results for the first half.

Li said China's main carriers are bracing for more of the same in the second half, given lackluster third-quarter demand - usually the peak season for travel.