China in the next year could see about a 50% increase in its number of passenger airlines. There are 15 known airlines that either plan to launch or have launched in recent months. This rapid growth comes as China loosens restrictions on new carriers that have been in place since mid last decade.

capa-306x90These new carriers join about 10 airlines launching in other parts of Asia in 2014. Whereas those 10 airlines outside of China are exclusively low-cost carriers, almost all of China’s new carriers will be full-service – at least initially.

There is a wave of LCC interest in China accompanied by some regulatory liberalisation, such as on minimum fare pricing. Yet there are more policies that need to be loosened or streamlined, and then upheld in practice.

While there is large growth in the number of airlines, their size will be small. Recently-launched Loong Airlines has about 12,000 weekly domestic seats compared to China Southern’s 1.7 million. But there will be impacts in the specific markets these new airlines operate in. Their ultimate, long-term potential with a new business model or one free of legacy weight is the larger worry for the country’s incumbents, including the behemoths, which are among the world’s 10 largest airlines.

China’s major airlines have been publicly quiet on this market re-ordering but are closely watching it, and planning their own response.

In late 2013 there were about 25 scheduled passenger airlines in China. (This number is actually subject to interpretation as some airlines fly under a parent company’s code.) From late 2013 to Apr-2014, three airlines entered the passenger market: Loong Airlines, Donghai Airlines and most recently Qingdao Airlines on 26-Apr-2014.

There are a further 12 known airlines hoping to launch by the end of 2014, collectively giving China 15 new airlines since late-2013. The proposed carriers’ readiness varies from still awaiting approval to planning a first flight in the next few weeks.

Incumbents do not need to be told of the rapid growth efficient airlines like LCCs have had in other markets. It is well accepted that China’s market must and will change, with market share slowly redistributing across other carriers, and with LCCs having a much larger role. Impacts on existing businesses could in the long-term be profound.

The seeds now being sewn that will bring about this change.

For more on this story, read the full CAPA analysis here.

This story originally appeared on CAPA – Centre for Aviation, a Skift content partner.

Additional links from CAPA:

Tags: china
Photo Credit: Qingdao Airlines, one of the new airlines launched this year in China. Courtesy: Airbus