Domestic Flights in China Could Soon Get More Expensive

By Bridget O'Donnell

Domestic airfare in China could soon get more expensive for travelers after the government announced it would be easing state control over ticket prices last week.

In a joint statement issued January 5, the Civil Aviation Administration of China and the National Development and Reform Commission announced that government-owned airlines would have more freedom over setting prices for passengers flying on domestic routes.

Under the more relaxed rules, government-set caps on flight fares would be lifted and airlines able to set prices if a specific route is served by at least five different carriers. Prices can be increased by up to 10 percent on routes not exceeding 15 percent of the carrier's total routes.

The more market-based policy is now in effect and applies to at least 300 routes.

Shares for China's biggest airlines, including China Eastern, Air China and China Southern, surged shortly after the announcement.

[Image via Flickr]

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