News

China’s airlines stir uproar with new fare system

24 Apr 2009
Travellers on China’s domestic routes are up in arms after most airlines adopted a new fare system that allegedly increased airfares. China Travelsky Holding Company, which runs the ticketing system used by majority of Mainland Chinese carriers, adopted the new fare formula this week. As a result, passengers have to shoulder an 20 percent increase in domestic airfares and to receive reduced discount rates on special deals. “We think the public can accept the price, and once the market goes down, airline fares may drop again,” said Luo Guanshi, an official with Shanghai CYTS Tours. The Guangzhou Daily reported the price hike was allegedly a decision made last month by Air China, China Southern Airlines, China Eastern Airlines, Hainan Airlines and Shenzhen Airlines. Other local carriers followed their lead. In another news report, an airline insider told the Shanghai Daily the new fare system brings local airlines closer to international ticket-pricing methods. Airlines can still adjust the rates in line with demand. Many airline analysts pointed out airlines still need to consider passenger traffic, capacity, environment and costs when setting prices, so travellers flying within China can still get lower-priced tickets when demand drops. But an unhappy public greeted the new fare system and about 3,000 disgruntled consumers posted criticisms on the popular internet portal sina.com. With the new fare scheme, domestic flyers – spoiled previously by huge discounts on special offers - have to get used to lower discount rates. “Before, there were special offers (with discounts) as high as 92 percent off. Now, it is hard to find special offers at 70 percent off,” said unnamed air ticket sales clerk, quoted by the Guangzhou Daily. Under the new fare system, discount on air tickets is reduced 1.25 times. Thus, previous discount of 20 percent will become 16 percent and a discount of 30 percent will become 24 percent. There are fears that effects of the new fare system would trickle down to the hotel industry in China. “The hotel business is getting worse especially as overseas business and long-haul travel groups stay home,” said Jimmy Zhu, deputy general manager of marketing with Hongkong CTS Hotels. “Now, the domestic airlines declared a mark up in ticket prices and this will shake local business trips again”. Zhu added: “The air ticket price affects every person, not only business people who travel out for business frequently. I feel the airlines price rise is not fair to all”. Joshua Tan  
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