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Domestic Airlines Facing Fierce Competition
Airlines in Chinese mainland are facing increasing competition from both foreign counterparts and an improved domestic railway system.
Three foreign airlines - Northwest Airlines, the United Airlines and Air France - have begun offering promotional tickets at a discount to normal prices, as part of their efforts to attract Chinese passengers during the low season. Domestic airlines all regarded the move as a signal of the foreign airlines' ambition to "seize the Chinese market".
As a consequence, some domestic airlines have adopted a series of measures including increasing flight frequencies and providing more convenient services. But another challenge seems to be the most critical. Rising oil prices have placed further pressure on Chinese airline companies. The fuel costs would still become a tremendous burden on the airlines if they were not allowed to increase the prices for air tickets.
Unveiling its new flight schedule for this winter and spring, the Civil Aviation Administration of China, said it would control the total number of domestic flights by cutting money-losing routes. But the direct flights on the feeder routes would not be included in the new controls in order to encourage domestic air carriers to open western routes.
The Ministry of Railways increased the permitted speed of the trains again earlier this month, making rail transport another competitor. The speed of some trains increased to 140 to 160 kilometers per hour. The ministry had increased speed three times in the past three years and would make further increases to reduce traveling times.
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