China Eastern converts subsidiary into budget carrier

[BEIJING] China Eastern Airlines Corp Ltd launched yesterday 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 told reporters in Beijing. "We'll see explosive growth of LCCs (low-cost carriers), especially in China," Mr Liu said. "In Asia alone, LCCs have already accounted for over one third of the market."