Airasia Bhd, Southeast Asia's biggest budget carrier, planned to start its maiden flight to the Chinese mainland April 1 by offering daily services between Bangkok and the southeastern Chinese city of Xiamen, tapping into one of the fastest-growing air travel market in the world, the China Business News reported.

The Malaysia-based carrier would offer an amazingly low price of 299 yuan (US$36.11) for its first round-trip flight, much lower than the 1,960 yuan offered by local carrier Xiamen Airlines, the newspaper said. Xiamen Airlines currently operated two flights a week on the same route, with a one-way flight costing 1,350 yuan, and the regular round-trip fare was 1,000 yuan, the newspaper said.

The China Business Weekly reported that AirAsia was expected to become the first foreign low-cost carrier to land on the mainland and the flight would be operated by AirAsia's joint venture in Thailand.

The paper said General Administration of Civil Aviation of China (CAAC), the country's civil aviation regulator, had also given its nod to AirAsia to operate flights to two other Chinese destinations, Chengdu, in southwestern China's Sichuan Province, and Kunming, in southwestern China's Yunnan Province.

Jian Ping, head of the travelers' department of Xiamen Airlines, told the China Business News he saw little impact on his firm as he expected AirAsia to only lure some leisure passengers away, which currently accounted for some 30 percent of Xiamen Airlines' clientele.

But Su Yanhua, a marketing manager with the newly established business development department of Xiamen Airport Group Co., was quoted by the China Business Weekly as saying that local economy would benefit because budget carriers would help revive the local tourism industry and other commercial segments, such as accommodations, tourism spots and shopping malls.

China's domestic passenger trips grew 38 percent to 120 million last year and profit in the Chinese aviation industry rose to US$1 billion, Xinhua reported. Industry analysts expect that as growing numbers of increasingly wealthy Chinese business travelers and tourists choose to fly, that growth will continue at least several years.

Airbus expects passenger traffic in China to rise 9.1 percent a year and the country's freight traffic to increase 9 percent annually over the next 10 years.

Budget carriers, known for their cheap flights and low overheads, are expected to see huge potential demand in China as regulators move to free up some of the previously shuttered industry and more budget-conscious people choose air travel.

Jetstar Asia and Valuair, two Singapore-based low-cost airlines, are also seeking Chinese Government approval to fly from the city state to major mainland cities, domestic media have reported.

Okay Airways, China's first private airline, would start its first commercial flight March 11 after winning approval from CAAC. The carrier, modeled on budget carriers, is likely to be soon followed by other small carriers also promising cheap flights on smaller domestic routes.

(China Daily March 11, 2005)