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China to Loosen Control over Air Ticket Prices
China will moderately loosen the control over air ticket prices and let them change with the market situation, according to an official with the General administration of Civil Aviation of China (CAAC) in Beijing on Friday.
With the gradual perfection of regulations and market order, China's civil aviation authorities will become supervisors of air ticket prices instead of directly fixing them, Hai Liancheng, director of the CAAC finance department, told a press conference.
Local analysts noted that Chinese passengers will have the chance to enjoy preferential prices soon, since airlines are to decide the prices themselves.
CAAC gave permission for ticket price discounts to attract more passengers in 1997, which was warmly welcomed by air travelers.
However, the measure finally caused negative price competition among airlines, due to inadequate market regulations. As a result, the industry suffered a loss of 2.4 billion yuan in 1998.
In 1999, CAAC resumed the system of fixed prices, helping the sector turn losses into profits.
"But this is merely a temporary policy. How to perfect the price policy is a vital part of the reform of China's civil aviation, and our final target is to establish a flexible pricing system under macro control," said Hai.
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