An entrepreneur hailing from Shanghai, Wang Zhenghua first founded Shanghai Spring Tour in 1981. Spring Tour was one of only a handful of private travel agencies at the time but in less than a decade Wang turned it into one of the largest travel agencies in China. He then decided to enter the country’s aviation industry in 2004.
New kid on the aviation block
One of Wang’s big challenges is that Chinese aviation is dominated by three state-owned firms: Air China, China Southern and China Eastern. He complains that regulators have held up applications to fly on prized routes for years (he’s still waiting for permission to fly to Taipei, for instance). In other cases, his gripe is that the authorities have given him undesirable time slots, such as his Shanghai-Beijing route, for which his flights arrive in Beijing after midnight. “Whenever we open a new route they get tense, and sometimes they take an unfriendly approach,” Wang said in a recent interview with Reuters. “The approving authorities are also in a tough position – they are afraid of the big companies.”
Wang declared that his goal wasn’t to create the biggest airline but one that “even the lao bai xing (general public) can afford to fly”. His timing was good. Spring launched at a time when the new middle classes were newly eager to explore China or travel for business. By 2006, the budget airline had announced a profit of Rmb20 million. Not much, but at least it was profitable.
Spring Airlines is now China’s biggest privately-owned budget carrier, with nearly 60 routes inside the country and seven more overseas. It is said to be speeding up plans for an IPO on the Shanghai Stock Exchange.
Back in 2006, Spring Airlines launched a promotional airfare for the route between Shanghai and Jinan, the capital of Shandong province, for just Rmb99. A limited number of tickets were offered at Rmb1. The move shook the industry, as the lowest fare offered on the route at the time was Rmb300. But Chinese travellers were a lot more excited about the promotion than the aviation regulators. In fact, Wang was threatened with a Rmb150,000 ($23,500) fine for disrupting market order.
“You have to take it a bit slowly, rather than being too aggressive and making enemies everywhere,” says Wang about what he learned from the experience.
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