BEIJING, Sept. 1 -- Chinese budget airliner China United Airlines (CUA) will remove all first-class seats by the end of the month, the company announced Monday.

The move aims to reduce the carrier's costs to a competitive level within three to five years, said Wu Gang, deputy manager of CUA, a subsidiary of China Easter Airlines.

All first-class cabin space will be restructured to business-class seats. Passengers who have already booked CUA first-class seats can return tickets for a refund, he said.

The airlines' announcement came in the wake of an austerity drive by China's leadership to crack down on luxury lifestyles among party officials.

Prior to the CUA's removal of first-class seats, China Southern Airlines, the country's largest civic aviation carrier by fleet, said it would also cut the first-class seats among its single-aisle planes next month.

Qi Qi, a member of the China Air Transport Association, said the frugality measures ordered by the central authority have greatly dampened demand for first-class seats among officials of government departments, public institutions and senior managers of large state-owned enterprises.

"Now, the consumption of first-class seats is considered hedonism," Qi said, adding airlines should boldly leave behind their obsession with high-end products and focus on serving the ordinary people.

As the Chinese economy slows and the government steps up its anti-graft crackdown, first-class seats and other opulent buys are increasingly viewed as luxuries that must be disposed.

For example, China Mobile, China Telecom and China Unicom, the Chinese telecommunication giants, were required in July by the country's state-asset supervisor to close their VIP lounges in airports and railway stations before October this year to cut marketing expenses.

"China's aviation market will see an upsurge of budget airlines and the transformation of CUA is in line with this trend," said Liu Shaoyong, general manager of China Eastern Airlines, CUA's parent company, "All we need to do is to follow this ride to embrace a more public-oriented market."

The CUA' removal of first-class seats are also in line with similar moves by international air companies.

American Airlines Inc. said it will increase the size of its Boeing 777-200 fleet by removing the first-class cabin and upgrading the business-class cabin.