CRI Home - Photo- Forums - Talk China - Surf China - About China -  
  Webcast | CRI Today | China | World | Biz | SciTech | Sports | Life | Showbiz | Easy FM | Learn Chinese / English | Weather | Events
Budget Airline Forced to Raise Price
2005-7-26 9:13:57      China Daily
Budget airline Spring has been forced to raise its widely-publicized 199 yuan (US$25) fares less than a week after launching.

Shanghai-based budget carrier Spring Airlines rose the price of its cheapest fares from Shanghai to Yantai, Nanchang and Mianyang by 100 yuan (US$12), bowing to pressure from other competing airlines.

However, the new 299 yuan (US$37) ticket price now includes one night's hotel accommodation.

Backed by heavy advertising and news coverage, Spring's maiden flight from Shanghai to Yantai took off on July 18. The company offered a 25 per cent discount from an already low fare, massively undercutting the current average ticket price of 800 yuan (US$99) charged by other companies on the same route.

The discount fare quickly became a cause for concern among other airlines and it was their protests that reportedly led to the General Administration of Civil Aviation of China (CAAC) putting pressure on Spring to raise prices.

"We raised the price in accordance with Regulation No18 of the CAAC," said Li Weimin, a Spring spokesman. "The other companies' requirement was another reason. Both led to raising the price."

CAAC regulations limit discounts to 45 per cent of standard prices.

Spring cut costs by serving no meals or snacks on the flight.

Despite the price hike, officials from Spring said they will continue to work to attract passengers and encourage people to book flights online.

Meanwhile, company officials from other airlines said the 199-yuan (US$25) deal had achieved its purpose of attracting publicity in the run up to the company's launch.

Ge Xuejing, Spring's executive officer, said that fixed costs make up more than 80 per cent of the price of every ticket. These costs include fuel (30 per cent), maintenance (25 per cent) and lease costs (25 per cent). Only a marginal 20 per cent of the ticket price can be subject to discounts or deals.

(Photo: Xinhua)

        Talk China        Print        Email        Recommend
Related Stories:

  Copyright of All rights reserved.

Reproduction of text for non-commercial purposes is permitted provided that both the source and author are acknowledged and a notifying email is sent to us.

postalChina Post is progressing with its scheme to merge its two sub-businesses.
textilePeter Mandelson said he would hold talks with Bo Xilai this week.
YahooChinese e-commerce operator is in the late stages of talks to sell a 35 percent stake to Yahoo Inc.
BOC IPO Could Take Place in 2005
China, Hong Kong, Japan, and Aussie Market Roundup 
CNOOC's Market Value Up By $7b
Producer Price Index Rises
Lenovo Profit Up 6% After IBM PC Buy
Power Supply Sees Robust Growth
HK Urges Manufacturers to Go "Green"
Major HK Banks's Interest Rate Hike
China Mobile First-Half Profit Rises