China to Loosen Grip on Domestic Airfares, modest Increase of Air Ticket Price

17/01/2015
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News:
According to the announcement of the Civil Aviation Administration of China (CAAC), China’s aviation regulator has loosened its grip on air ticket for 101 domestic routes as part of measures to further open up the country’s aviation market. Air China and several domestic airlines will be allowed to set ticket prices and air cargo rates, which had been previously controlled by the government.

Air China

Air China

In order to deepen “airfare reform” and promote “sustainable and healthy development” of the country’s airline industry, the CAAC introduces this policy. It will be be beneficial for the Domestic Airlines to hike their fares freely at any time, including peak travel seasons, such as upcoming Lunar New Year Holidays in February.

Depending on the words of the analyst of the civil aviation website, the prices of most air lines will increase by 8% – 12% based on the rules of this fare adjustment because of the 1200-1500 kilometers of the domestic air lines. The first ones affected by this policy are the economy class of full price tickets of Beijing, Shanghai, Guangzhou.

However, it will not make the ticket price increase by a higher ratio, due to the competition of high-speed railways and other ground transportation. There is still many discount air tickets among the popular and hot tourist cities, such as Beijing, Xian, Chengdu, Kunming.