HNA Group subsidiary Urumqi Airlines will begin operating as a low cost carrier (LCC) from July 16.

Northwest China-based Urumqi was launched in August of 2014 and operates a fleet of nine Boeing737-800s to more than 18 destinations. The carrier plans to expand its fleet to 18 aircraft by the end of 2017 and to 50 by 2020 as it also grows its network.

As part of its LCC transition, the airline will stop serving complimentary meals and will charge for checked bags. The airline says it expects to offer fares 5%-12% lower than average.

Urumqi chairman Cen Jianjun noted in a written statement that the LCC model would stimulate traffic.

Chinese LCCs occupy have just an 8.3% share of China’s air transport market, representing huge potential for market growth if they can address airport slot constraints and a shortage of pilots.