Taking to the skies: The man behind China's Spring Airlines

Spring Airlines, China’s best-known budget airline, was founded by Wang Zhenghua, who became a legend in the nation’s business circles.

The former civil servant went into the private sector in the 1980s, when China was beginning its economic reforms and opening up to the outside world. As one of the earliest entrepreneurs in that process, Wang rode a rapidly rising tide.

He was known for his cost controls, including famously sharing a 12-square-meter office with a colleague.

The airline was among the first four carriers granted a license in 2004, after the Chinese government opened the industry to privately owned businesses. The other three have long gone, either collapsing or being acquired. Through it all, Spring remained strong, with 15 percent average annual profit growth.

Wang not only seized the coattails of economic liberalization, but he also captured the new zest for travel as household disposal income rose and the nation relaxed restraints on foreign travel.

Wang is a savior to many smaller Japanese cities that benefited from a boom in Chinese tourists when the airline launched flights there.

When Spring started its first flight to Japan at a small airport in Ibraki Prefecture near Tokyo, the area was virtually unknown to Chinese tourists. Now flights there are usually sold out. Spring also flies to eight other Japanese destinations, including Tokyo and Osaka.

The airline has also ventured into other Asian countries including Singapore, South Korea and Thailand, among others.

“For more than 30 years, I’ve explored many business opportunities, and people call me this or that — miracle, legend, savior — but all I do is merely move people around,” Wang somewhat humbly explained to Shanghai Daily at the airline’s headquarters near Hongqiao airport.

“I’m very sane about our pros and cons,” he went on. “We need to explore new potentials in areas related to what we are good at, but we must not suddenly switch to an entirely different industry.”

The interview was held in a conference room after assistants explained that Wang’s office was too tiny for a video camera. By comparison with other corporate conference rooms, his is remarkably unostentatious, with only a long table and several folding chairs. Plants and a sofa were moved in temporarily for the interview.

“My flights are 30 percent cheaper than others, yet I have the best profits in China,” Wang boasted of his legendary cost controls.

At the same time, he is generous with staff compensation and training. They may not travel business class or stay in five-star hotels, but they do benefit from a stock-sharing plan.

Pilots and air hostesses were dropping by from the nearby airport, looking tired yet smiling. Other employees, including security guards, greeted Wang like an old friend.

He actually doesn’t work in that famously small office anymore. The 75-year-old entrepreneur technically retired and passed the torch to his older son in 2017.

Wang asked more than 30 executives to retire with him because he didn’t want the next generation of company executives to be constrained by yesterday’s ideas. His grand plan was to take the old pals with him on an around-the-world trip. That didn’t happen. Instead, Wang and the old guard have remained in consulting roles.

“We ceded power, but we wanted to contribute somehow,” he said. “I thought I would want to work until I get Alzheimer’s. Now, I really want to just quit and travel around the world ... play, have fun.”

His assistants tittered. “Don’t listen to him,” one said, “he never stops working.”

Wang has been a workaholic since he worked in a local neighborhood and later for the Changning District government. In the early 1980s, he was assigned to explore business opportunities, and Wang immediately thought about “moving people around.”

“The government was starting to focus on the country’s economic development, and I knew huge transformations were on the way,” Wang said, recalling how he carefully studied economic development in foreign countries.

“Traffic is always a pioneer in economic development, so I ventured into five industries, all related to traffic,” he said.

He had a passenger car made in 1982, one of earliest in the country, and sold it for 20,000 yuan (US$2,800; the annual income was around 1,200 yuan in the 1980s). He started a company with 40 buses that transported tourist groups between Shanghai and cities in nearby Jiangsu Province. He also tried a delivery company, a cab company and in 1981, he founded a tourism agency.

When he decided to go private in 1986, Wang chose the tourism agency — now Shanghai Spring International Travel Service — as the path forward.

In 1994, the travel service was the largest of its kind in the country. But instead of celebrating its successes, Wang looked at the industry’s increasingly fierce competition and decided that the next step was to start an airline.

The next step

At that time, most Chinese were traveling by bus or railway, and multinationals were just starting to set up representative offices in Shanghai. There was no talk about privately owned airlines in China, but that didn’t deter Wang.

With Spring Travel’s leading position in the industry and China’s huge population as leverage, Wang visited major airlines around the world to do research on the airline industry.

Wang started by collaborating with state-owned airlines, buying up vacant seats at a wholesale price. At first the airlines were leery, but soon the wholesale seats he was buying sold so well that they put a limit on the number he could buy every month.

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He also started sending reports of his successes to the nation’s aviation authority to make sure that officialdom was aware of his business.

“We prepared for 10 years,” Wang said. “Before we had our own airline, more than 20 flights every day were filled with my customers. Everyone in the industry knew about us. So when the government was ready to grant licenses to private airline companies, we got one.”

The airline was given approval in May 2004. Its first aircraft, an Airbus A320, was delivered about a year later at Hongqiao International Airport in Shanghai. Its first flight was from Shanghai to Yantai, Shandong Province.

To keep operating costs low, the airline sells tickets exclusively on its website and at a few designated ticket offices, bypassing travel agents. In the absence of complimentary service, passengers may buy meals and beverages on board.

The budget airline concept proved a big success, but, again, Wang wasn’t content to rest on his laurels. He started looking at international travel as the next step forward.

“I knew it would be challenging, but we just had to go down that road,” he said.

In July 2009, Spring's plan to establish overseas routes was approved by the General Administration of Civil Aviation, making it the first budget airline in China to venture into the international market.

It wasn’t easy at first. When Wang set his eyes on Japan, none of the big airports would give any landing spots for a small, privately owned carrier from China.

“So we picked Ibaraki, a tiny airport that nobody flew,” Wang recalled. “Even their own officials told me it couldn’t be done.”

The Ibraki airport opened in 2010. A year later, Wang went there to meet the mayor. Most other carriers had left the airport. Business was bad.

“I wasn’t afraid,” he said. “I had my clients from the travel service as a backbone.”

When flights to Ibraki started, they were 90 to 95 percent occupied. Before he knew it, Wang was besieged by invitations from many cities in Asia for flights.

Wang looks back somewhat nostalgically at the dramatic changes in China that lifted him to such heights.

He recalls how Hongqiao airport sat in the middle of farmland when he was making preparations for the launch of Spring Airlines.

“Shanghai is such a great commercial center with a rich culture,” he said. “We had good opportunities amid economic development in the country and in the city.”

But no more time for reminiscing. Wang ends the interview because he has to rush to the airport to catch a flight for a business trip.