China Spring Air Aims To Double 2009 Profit

Privately-run Chinese carrier Spring Airlines aims to double its net profit to CNY40 million yuan (USD$5.9 million) this year, banking on a low-cost operating model to lure customers despite a slowing economy, its chairman said Monday.

Spring Airlines is expected to book CNY2.2 billion in sales this year, up from CNY1.6 billion in 2008, Wang Ronghua told reporters on the sidelines of an event to take delivery of an A320 single-aisle plane.

The carrier plans to take delivery of six more planes over a three-year period, increasing its fleet size to roughly 30, including leased ones, a company spokesman said.

Spring Air's debt ratio is at 40 to 50 percent, far lower than over 80 percent for many of its state-owned peers, including loss-making China Eastern Airlines.

Wang attributed Spring Air's relatively better financial situation in part to a low-cost operating model which gives the carrier a much higher passenger load factor of 95 percent compared to roughly 75 percent at many of its larger peers.

The Shanghai-based carrier, which flies around 30 domestic routes, will apply to the regulator to start servicing Hong Kong and Macau this year, the company spokesman said.

It is considering opening international service to Japan and Hong Kong next year if the air travel market stablizes, he added.