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Floor price on domestic routes scrapped to boost China air travel

Chinese carriers will now be able to offer more cheap airfares than before. Chinese civil aviation authorities recently scrapped a rule that was mandatory for the airlines to keep a minimum domestic ticket price. The government’s move is being seen as an attempt to boost air travel demand within the country. This will benefit many Chinese carriers including Air China, China Southern Airlines, China Eastern Airlines, Spring Airlines, Juneyao Airlines and others.

Media reports quoted Xia Xinghua, the civil aviation regulator’s deputy director, as saying that by eliminating the floor level for fares the Chinese carriers will be able to attract more customers by offering cheaper prices. The country’s civil aviation regulator may in future consider adding a budget air terminal in the planned second airport in Beijing.

Media reports also quoted Li Yanhua, a professor at Tianjin-based Civil Aviation University of China, as saying that a mass-market strategy will be put in place by the regulator ensuring that air travel for the Chinese people becomes more affordable. He said that this is a growing trend around the world, and that China is not an exception.

According to a rule published in 2004, the airlines in China were required to set fares not higher than 1.25 times and not lower than 60 percent of a base price. Media reports said that the Chinese carriers would be requiring more than 5,000 aircrafts in the next 20 years.

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