Cheap fares and no legacy are helping China's budget airlines beat State-owned carriers in the stock market.

With combined fleets exceeding 1,000 planes, $31 billion in market values and up to 20 times more workers, State-controlled China Southern Airlines Co, China Eastern Airlines Corp and Air China Ltd on average provide just one-third the returns of Spring Airlines Co and Juneyao Airlines Co, according to data compiled by Bloomberg. Even the Chinese regulator has lauded Spring as a model of efficiency.

Investors have driven up shares of Juneyao fourfold since the stocks listed last year, while Air China, the leader by market value, has fallen 47 percent in the same period. The data also suggest the three carriers need to step up the pace of reforms to better exploit growth in the Chinese air travel market, poised to become the world's largest within two decades.