China relaxes fare rules on competitive domestic routes

The Civil Aviation Administration of China (CAAC) relaxed fare setting rules on domestic services operated by more than five carriers last Friday, The Financial Times has reported.

According to the newspaper, carriers have been allowed to reduce fares on the most competitive routes by up to 10%, effective immediately.

The move is intended to increase airlines’ competitiveness against the rapidly expanding high-speed rail network.

According to the ch-aviation capacity module, the largest operators of Chinese domestic services are China Southern Airlines, China Eastern Airlines, and Air China with 16%, 14.1%, and 10.3% market share by capacity respectively. After the announcement, share prices of each of these airlines went up by over 10%. Other significant players on the domestic market include Hainan Airlines, Xiamen Airlines, and Shenzhen Airlines.

The most competitive Chinese domestic services include Beijing Capital-Shanghai Hongqiao with seven airlines offering 295 weekly round trips, Shanghai Hongqiao-Shenzhen with seven airlines offering 280 weekly round trips, and Beijing Capital-Shenzhen with eight airlines offering 258 weekly departures.

Aviation News

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