Private airline in China tiptoes around state Goliaths

Tue Jul 10, 2012 12:01am EDT
 
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By Jason Subler

SHANGHAI (Reuters) - Wang Zhenghua employs a simple philosophy for surviving as a private airline in China's state-dominated aviation sector.

"You have to take it a bit slowly, rather than being too aggressive and making enemies everywhere," says Wang, founder and chairman of Shanghai-based Spring Airlines, of the approach that has enabled him to successfully carve out a piece of the $56 billion-a-year Chinese airline industry.

Wang has come a long way since his start in 1981 running a tiny tourist agency in central Shanghai, beating the odds to build up not just one of the country's most prominent travel agencies but also its biggest private budget carrier, with nearly 60 routes in China and seven overseas.

His tale underscores the challenges private Chinese companies face, even as Beijing pushes for them to play a bigger role in driving growth in the world's second-largest economy.

For Wang, one of the biggest obstacles to expanding has been resistance to his opening new routes from state-owned airlines.

"Whenever we open a new route they get tense, and sometimes they take an unfriendly approach," Wang said in an interview inside the mock-up airplane fuselage that staff at his spartan headquarters use to train new flight attendants.

"The approving authorities are also in a tough position - they're afraid of the big companies."

WORKING AT THE MARGINS   Continued...

 
A crew member of Spring Airlines talks with travelers onboard an Airbus A320 aircraft at Hongqiao airport in Shanghai July 6, 2012. REUTERS/Aly Song