China's Int'l Airfares to Float According to Market Demand

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Last updated at: (Beijing Time) Wednesday, July 16, 2003

China's Int'l Airfares to Float According to Market Demand

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The public price hearing on China's domestic airlines will have no impact on China's international airlines, whose prices may float according to market demand, said an official from the State Development and Reform Commission Tuesday.

The one-day public hearing on China's domestic airfares opened in Beijing Tuesday morning, with the planned changes to domestic airline prices discussed in public.

According to the set scheme, airlines will be allowed to raise ticket prices by a maximum of 25 percent or cut them by up to 40 percent on the basis of the benchmark price of 0.75 yuan (0.09 US dollar) per kilometer per passenger.

Kuang Xin, head of the civil aviation section of the transportation department of the State Development and Reform Commission, told Xinhua that the floating limits will not apply toChina's international airlines.

The benchmark prices of China's international airlines have all been established according to the standards of the International Civil Aviation Organization (ICAO), and they also face competition from foreign aviation companies, said Ma Zheng, an official from the General Administration of Civil Aviation of China (CAAC).

The best way to ensure that China's international aviation thrives is to operate in compliance with free market rules, said Ma.

Huang Wei, a scholar from a Chinese aviation college, said the price reforms with regard to China's domestic airlines also provided Chinese society with an example of market-oriented reform,which will follow the move of the international airlines, but float within a set range in accordance with market demand.

According to Huang, currently, the same domestic airline may charge different prices in China and abroad.

However, with the new aviation price reform, tickets sold in China and abroad will be subject to the same benchmark price, about 0.75 yuan (0.09 US dollar) per kilometer per passenger.

The reform will help to integrate China's aviation with the international aviation industry and will also clear up misunderstandings on the part of some foreign tourists on China's airfare policy, Kuang Xin said.

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