Following last year's unprecedented policy change, China's budget carriers are poised to soar and may hold the key to the future of aviation in the mainland, an analyst told CNBC.
"The future growth of aviation in the mainland will be budget travelers, as well as tourists looking to travel domestically and within Asia via low-cost carriers," said Jonathan Galaviz, partner at Global Market Advisors.
"The Chinese central government clearly indicated that they are looking for companies like China Eastern to… service customers like AirAsia or Southwest Airlines [do] in the U.S.", Galaviz added, referring to state-run carrier China Eastern's decision to convert a subsidiary into a low-fare unit early this month.
Beijing's decision last year to lift a six-year ban on the formation of new airlines jumpstarted the low-cost carrier (LCC) market. Incentives including a cut in airport charges and simplifying approvals provided a further boost earlier this year.
Budget carriers, led by Shanghai-based Spring Airlines, currently account for 5 percent of China's total air travel, according to Reuters. The untapped potential in China's aviation market – the world's second largest – attracted a wave of new entrants including HNA Group's West Air and Jiuyuan Airlines.