CHINA Eastern Airlines Corp. yesterday launched its budget airline, becoming the first State-run carrier to tap the low-cost travel segment long dominated by privately run Spring Airlines.

    China Eastern said it would use the 80 Boeing 737 planes it had ordered from Boeing Co. last month in a US$7.4 billion deal for the budget airline China United, which was created by converting a full-service subsidiary.

    China United aims to have up to 100 planes in its fleet by 2019 from 26 now, China Eastern chairman Liu Shaoyong said.

    “We’ll see explosive growth of low-cost carriers, especially in China,” Liu said. “In Asia alone, low-cost carriers already account for over one third of the market.”

    Low-cost carriers, led by Shanghai-based Spring Airlines, account for up to 7 percent of the air travel market in China, compared with Europe, where they control 50 percent of the short-haul market.

    A slew of incentives issued by the Civil Aviation Administration of China earlier this year, including cutting airport charges and simplifying approvals, has encouraged more budget airlines to take to the skies.

    Industry analysts say China Eastern’s foray into the budget segment may encourage other carriers such as Air China and China Southern Airlines to follow suit. (SD-Agencies)