Why Did the Surge in Oil Prices Render Spring Airlines’ Extreme Cost-Control Strategy Ineffective?

Original Release | Jinjiao Finance (ID: F-Jinjiao)

Author | Mai Yingzai

“Why does it feel like flight tickets suddenly became so expensive?” Since March, complaints about ticket price increases on social media have noticeably increased.

In the trending topic #机票涨价# below, a netizen from Zhejiang lamented: “At the beginning of the month, a flight to Phuket only cost 2300 yuan, but by mid-month it had risen to 3900 yuan.” Overseas students also expressed their frustration, stating that the price of flights from Australia to China doubled in just one night, turning the “stuck in the kangaroo circle” joke into reality.

Behind these emotions lies a genuine price increase.

Recently, several airlines, including China Southern Airlines, Juneyao Airlines, China Eastern Airlines, and Changlong Airlines, have successively raised the fuel surcharge for international routes, with increases generally exceeding 50%. According to reports, the next adjustment window for domestic routes’ fuel surcharges will be on April 5.

What’s even more noteworthy is that, in this round of price hikes, the most “abnormal” increase is not seen among traditional airlines but rather at Spring Airlines.

This company, known for its low prices and often joked about as the “ice cream store of the aviation industry,” has raised prices even more sharply this time, with some flights’ fuel surcharges doubling, such as the flight from Shanghai to Kuala Lumpur and Penang, which increased from 180 yuan to 360 yuan.

In the past few years, Spring Airlines has managed to remain profitable even when the industry was generally under pressure, relying on an almost extreme cost-control system: selling the cheapest tickets at the lowest cost while maximizing profits. This capability allowed it to maintain profitability during the pandemic, even becoming an “exception” in the industry.

But now, even this “exception” cannot hold out.

The collective increase in fuel surcharges this time has a superficial reason: international oil prices are continuously rising due to the situation in the Middle East; however, when even Spring Airlines has to raise prices to offset costs, a deeper issue emerges:

Is the entire airline industry about to enter an era of significant price increases?

For ordinary passengers, these macro issues can temporarily be put aside. The more pressing question is:

Is this round of ticket price increases just a short-term fluctuation, or the start of something more long-term?

“Penny-Pinching Economics”

In the domestic airline industry, Spring Airlines has always been an “outlier.”

In 2023, while most airlines were still struggling in the recovery phase after the pandemic, Spring Airlines took the lead in returning to growth, with revenue increasing by 114.3% year-on-year and net profit increasing by 174.4%, significantly changing market perceptions.

Since then, “Spring Airlines Economics” has become a hot topic in the industry. In the following two years, this advantage has further amplified: in 2024, net profit reached 2.273 billion yuan, firmly securing its position as “China’s most profitable airline”; by the first three quarters of 2025, net profit had already reached 2.335 billion yuan, surpassing the total for the previous year.

Interestingly, this high profit is not dependent on sales volume.

Data from the Civil Aviation Resource Network shows that among the six major listed airlines in 2025, Spring Airlines ranks second to last in passenger transport volume with 32.335 million passengers, but boasts the highest seat occupancy rate at 91.5%. To exaggerate, Spring Airlines may not operate many flights, but almost every flight is fully booked.

| Image source: Civil Aviation Resource Network

Why is Spring Airlines so popular? This brings us to the keyword of “Spring Airlines Economics”: cheap.

The online joke of “8 yuan to fly to Osaka, 9 yuan direct to Seoul” has spread widely primarily because Spring Airlines’ low-price strategy is extreme enough.

Supporting this is Spring Airlines’ “extreme penny-pinching” cost-control strategy. In 2024, its unit cost was only 0.316 yuan, a decrease of 3.3% from the previous year, while still retaining profit margins despite low ticket prices.

This “penny-pinching” is primarily reflected in capacity structure and spatial layout.

Spring Airlines has long adopted a single aircraft model (for example, the A320 series), with single-unit costs only one-third of larger aircraft, flexibly responding to weekend trips and nearby travel demands; red-eye flights extend the utilization period, achieving a daily aircraft utilization rate of 9.3 hours, higher than the industry average of 8.9 hours.

Looking inside the cabin, Spring Airlines has no first class or business class, converting everything to high-density economy class, reducing seat spacing and increasing passenger capacity by about 40%.

In 2009, Spring Airlines’ chairman Wang Zhenghua even proposed the idea of “standing tickets” on aircraft, increasing the number of seats on the Airbus A320 from the original 180 to 240.

| Early media reports on this matter.

However, this idea was too bold and did not receive approval from the Civil Aviation Administration, but it highlights their extreme cost-control thinking.

But if we only focus on “penny-pinching,” we might underestimate this strategy. Within Spring Airlines’ flight policies, there are many “hidden tricks” to increase revenue.

In recent years, controversies such as “6,000 yuan tickets being canceled a few minutes later, deducting a handling fee of 5,340 yuan” and “1,800 yuan tickets with a 1,500 yuan cancellation fee” have continued to ferment online, and Spring Airlines’ high cancellation fees have long been criticized.

According to media reports, Spring Airlines typically offers no free meals or baggage checks, allowing only a maximum of 7 kg for carry-on luggage; if checking bags at the counter, a 20 kg bag incurs a fee of 300 yuan.

Even more exaggerated, choosing seats also incurs fees, with the counter fee for selecting seats on domestic routes ranging from 40 to 100 yuan. Ultimately, the ticket price can sometimes even exceed that of other airlines.

This hidden income strategy has already generated considerable revenue. In 2024, auxiliary services such as seat selection fees and baggage fees contributed 1.03 billion yuan in revenue. Spring Airlines is not shy about this; in its 2023 mid-year report, it clearly stated that excess baggage fees and other auxiliary income are considered one of its core competitive strengths. Netizens’ complaints reflect this reality:

“Spring Airlines’ gifts have long been secretly priced.” “Without 800 cunning ideas, you can’t fly Spring Airlines.”

In these complaints, netizens have vented their dissatisfaction over the years.

Interestingly, these complaints have not changed their choices.

Even when mocked and complained about, passengers are still drawn in by the extremely low ticket prices.

Spring Airlines’ model allows users to continue accepting the price logic amid complaints, which is precisely the power of “Spring Airlines Economics.”

Understanding Spring Airlines, Becoming Spring Airlines

Reality is more honest than emotions.

On social media, “how to fly Spring Airlines at the bottom price” has developed a whole methodology, considered a “wisdom gem of budget travelers”: using soft bags instead of suitcases when possible, trying to carry all luggage onto the plane, using a foldable cart as a “carry-on suitcase,” stuffing clothes into U-shaped pillows…

“As long as you can arrive, checked baggage and meals are not a necessity.” When discussing why they are willing to sacrifice flying experience, a blogger summarized.

This choice reflects the reality of the domestic travel system. For medium to short-haul flights of 500-800 kilometers, civil aviation faces a 30%-50% impact from high-speed rail; only on long-haul flights over 1,000 kilometers do airplanes dominate. Once ticket prices rise, demand swiftly shifts to high-speed rail; conversely, when ticket prices are low enough, the speed advantage is magnified, and service shortcomings are weakened into “tolerable inconveniences.”

Spring Airlines relies on this logic to achieve high occupancy rates against the trend while revealing the dilemma of the entire industry: prices cannot be raised.

In theory, price increases should alleviate cost pressures, but reality shows significant deviations.

According to the performance forecasts of the four major airlines for 2025, five years after the pandemic, Hainan Airlines and China Southern Airlines are expected to turn losses into profits, while Air China and China Eastern Airlines will still incur losses, with net losses reaching 1.3-1.9 billion and 1.3-1.8 billion yuan respectively. McKinsey’s global airline report shows that 33% of respondents listed ticket prices as the primary consideration when booking. Once ticket prices exceed psychological expectations, demand will quickly decline, making price increases a high-risk strategy.

Under such constraints, an increasing number of airlines are beginning to “understand Spring Airlines, become Spring Airlines.”

Media reports indicate that China Southern Airlines, the largest airline in the country, has replaced thick seats on some aircraft with thinner ones, reducing the seatback thickness to about 3/4 of the previous model, and eliminating headrests at the neck area, achieving an average weight reduction of 400 kilograms per aircraft. According to its 2024 ton-kilometer fuel consumption data of 2.572 tons per ten thousand kilometers, a flight of 1,000 kilometers could save 102.88 kilograms of fuel by reducing weight by 400 kilograms.

Private airlines like Juneyao Airlines and Huaxia Airlines are also learning from Spring Airlines’ model of “single aircraft model, high-density layout.” Juneyao Airlines is gradually optimizing its fleet structure, increasing the proportion of A320 series aircraft while reducing cost pressures from multiple aircraft models; Huaxia Airlines focuses on the regional market, using a single aircraft model for operations, improving aircraft daily utilization while streamlining onboard services in an attempt to capture market share through low-cost models.

However, industry reports show that such cost-reduction measures remain scattered and fragmented, “cutting costs where it is expensive,” lacking systematic restructuring. Once faced with unavoidable rigid cost shocks, the entire system has little buffer space.

Currently, the rise in oil prices represents such an unavoidable shock.

“Penny-Pinching” No Longer Works

The rise in oil prices and previous price wars represent two different dimensions of crisis.

On one hand, fuel is the largest rigid cost for airlines.

Unlike optional services like meals and baggage, fuel costs cannot be eliminated or reduced. According to Li Xiaojin, director of the Aviation Economics and Industry Development Research Institute of China Civil Aviation University, fuel costs typically account for 30%-40% of an airline’s total costs, making it a significant and difficult-to-reduce expense. Every 1% increase in oil prices could add billions to tens of billions of yuan to the industry’s monthly costs.

On the other hand, fluctuations in the Middle East situation have exacerbated oil price risks.

The Strait of Hormuz accounts for approximately 30% of global maritime crude oil and 20% of liquefied natural gas trade, and its stability directly affects global oil prices. Public data shows that China imports approximately 11 million barrels of crude oil daily, of which about one-third (3-4 million barrels/day) needs to be transported through this strait.

Faced with these uncontrollable rigid costs, Spring Airlines’ past strategy of simplifying services and increasing aircraft utilization can no longer continue.

Although rising oil prices have not shaken Spring Airlines’ profitability base, they have disrupted the “low cost, high profit” operational model.

In 2024, its fuel costs accounted for 35.3% of operating costs, and as oil prices continue to rise, pressure could escalate sharply. A UBS research report indicates that if Brent crude oil rises to $70 per barrel, Spring Airlines’ net profit is expected to decrease by 8%; if it rises to $80, the decline could reach 23%.

Spring Airlines also acknowledged in an announcement on March 6, 2026, that rising international oil prices would directly affect operating costs, with expectations that the impact would gradually expand from April.

In contrast, traditional airlines are more sensitive to oil prices.

UBS’s research report predicts that for every $1 increase in Brent crude oil, the net profit of the three major airlines will decrease by 362 million to 426 million yuan; if oil prices rise to $70 per barrel, net profit could decline by 40%-60%. Persistently rising oil prices exacerbate survival pressures in the industry, and some small to medium-sized airlines even face the risk of elimination.

What’s more challenging is that cost pressures are not a single variable. Geopolitical risks can lead to detours, extended flight times, increased insurance costs, and other chain reactions, further raising operating costs. Under the weight of multiple pressures, raising fuel surcharges has almost become the only way for airlines to pass costs onto the market.

However, based on the logic that “price increases lead to a decline in passenger flow,” the actual room for raising fuel surcharges is limited, and it remains uncertain how much profit this will bring to airlines or how much it will offset costs.

Following this logic, a deeper issue emerges:

If price increases are not viable and soft projects have been nearly cut to the bone, what else can Spring Airlines and the entire industry reduce? Will it affect flight frequency, service stability, or even infringe on passenger rights?

This is the anxiety of passengers and also the anxiety of airlines.

More importantly, it reveals a cruel reality: rigid costs such as fuel, airport landing fees, and aircraft leasing cannot be avoided or cut, and no amount of meticulous “penny-pinching strategy” can completely absorb them.

“Spring Airlines Economics” may have reached its end. The future path for airlines lies in deeper structural optimization, such as improving capacity configuration efficiency, optimizing route networks, and finding differentiated positioning, rather than simply competing on price.

For passengers, the era of low-cost airlines’ benefits is quietly coming to an end.

Reference Materials:

Civil Aviation Resource Network “2025 Report Card for Six Major Airlines: Passenger Volume Exceeds 600 Million, Private Airlines Lead Growth”

International Financial News “The Four Major Airlines’ 2025 ‘Ice and Fire’”

Consumer Reports “Buying Cheap Tickets but Being ‘Harvested’—How Many Hidden Rules Do Low-Cost Airlines Have?”

Financial Sky COVER “The ‘Ice Cream Store of the Aviation Industry’ Making Big Profits Quietly”

Zhitong Finance “UBS: If Oil Prices Rise to $80 per Barrel, Mainland’s Three Major Airlines May Experience Losses”

Author’s Statement: Personal views for reference only.