Domestic airfare in China could soon get more expensive for travelers after the government announced it would be easing state control over ticket prices last week.
In a joint statement issued January 5, the Civil Aviation Administration of China and the National Development and Reform Commission announced that government-owned airlines would have more freedom over setting prices for passengers flying on domestic routes.
What're the NEW RULES?
PRICES
Under the more relaxed rules, government-set caps on flight fares would be lifted and airlines able to set prices if a specific route is served by at least five different carriers. Prices can be increased by up to 10 percent on routes not exceeding 15 percent of the carrier's total routes.
ROUTES
The more market-based policy is now in effect and applies to at least 300 routes. In the past, price adjustments were mainly made on branches routes and short-haul airlines with few passengers.
However, huge price changes will take place later on in business lines including Beijing-Guangzhou airline and Beijing-Shanghai airline, which carry more passengers.
AIRLINES
Shares for China's biggest airlines, including
China Eastern,
Air China,
China Southern,
surged shortly after the announcement.
Will prices rise this time?
According to General Administration of Civil Aviation of China (CAAC), except for Spring Festival or National Day, people can usually buy tickets at discounts. Additionally, airline companies may not raise ticket prices rashly while considering competitions from High Speed Rail.
Determined by the market
Prices of more airlines will be determined by the market. For airline companies, it means a greater level of autonomy because companies can adjust ticket prices according to own operating and market status.
Meanwhile, different prices will be set in low and peak seasons, and towards different levels of consumer groups. In such way, resources will be in a more rational allocation and profits will be maximized.
Moreover, if people discover that the air company doesn’t adjust its ticket prices in accordance with regulations, they can report to Price Supervision Department by calling 12358.
Details of Guangdong lines
There are 306 domestic airlines including 46 Guangdong lines which will subject to price adjustments.
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Source:
that'sPRD/www.caac.gov.cn
HACOS,Business Services Solutions Master