Boeing and Airbus compete for 30 aircraft deal with Chinese carrier Spring Airlines

Spring Airlines Co., the Chinese budget airline owned by billionaire Wang Zhenghua, is in discussions with Airbus Group NV and Boeing Co. to buy as many as 30 planes as travel demand surges in the country.

The Shanghai-based carrier plans to place an order this year, Vice President Stephen Wang said in an interview in Singapore today. The order will include an option for 30 more aircraft.

“China is a huge market,” Wang said. “The market has an even brighter future in the next decade. Budget carriers in China will have double-digit market share very soon from the current 5 percent.”

Spring Air wants to double its fleet to 100 aircraft by 2018 as China’s economic growth makes air travel affordable for more people in the world’s most populous nation. Shares of China’s first low-fare carrier jumped 44 percent on its trading debut Jan. 21, and climbed by the 10 percent limit for nine straight days.

Spring Air shares rose 0.2 percent to 66.49 yuan as of 10:17 a.m. in Shanghai.

The airline aims to raise the proportion of international passengers carried and revenue to about 25 percent by the end of 2015, its president said in September. For now it’s unlikely to follow the lead of other low-cost carriers such as AirAsia Bhd. and Scoot Pte. in pursuing long haul routes.

“We will consider long-haul services after 2020,” Wang said today. “For now we will focus on short-haul. We have already seen that long-haul service doesn’t work” for low-cost carriers.

Spring Air will start new routes to Osaka from four cities in China from the end of March. That adds to Spring’s existing flights to Japan’s second-largest city from Shanghai, Wuhan, Tianjin and Chongqing.

The company started a low-fare subsidiary in Japan last August, with flights from Tokyo’s Narita airport to Hiroshima, Saga and Takamatsu using Boeing planes.

(Kyunghee Park - Bloomberg Business News)